In an earlier incarnation I was into shoes. It wasn’t an Imelda Marcos thing, you understand, I was editor of a magazine for the international footwear business. I bring this up as one of my assignments was to Czechoslovakia to report on its very low-cost industry which was then shipping millions of pairs of cheap shoes to the west.
The imminent “velvet revolution”, which ended Czech communism, was already the hot topic of conversation. And what struck me most were remarks from an official who said that, while looking forward to democracy, being able to buy an imported fridge would have a more immediate impact on his family’s post-communist lifestyle!
I recalled this at last week’s American Hardwood Export Council conference in Hamburg. A key subject of debate was the upcoming enlargement of the EU to encompass Baltic and ex-communist central European states. Some fear this will increase the east to west flow of cheap wood products. But speakers also stressed that these countries don’t want to remain low-labour cost exporters. They aspire to western living standards, which will make them more lucrative markets for western firms and help to level the competitive playing field.
Mike Snow, AHEC executive director, said that China is headed the same way and should not be perceived as simply a bottomless pit for raw materials and an exporter of cheap manufactured timber goods. Its furniture industry output is now US$16bn, of which 75% is sold domestically in the world’s fastest growing consumer market.
Closer to home, British timber producers seeking markets for their increasing volumes of home-grown softwood believe the accession of the Baltic states to the EU will also benefit them. Over time it will simultaneously trim the Baltics’ labour cost advantage and boost their domestic consumption of timber and wood products. Good news all round.
