Why didn't industries from poorer European countries put the ones in the wealthier countries out of business after the EEC removal internal tariffs?

Joined Nov 2022
1,445 Posts | 156+
Caribbean
Similar to when Chinese workers put Americans out of business in the 1990s & early 2000s.
I'm not asking why they didn't relocate their industries to the poorer members of the EEC or later EU. I already know the reason for that.
 
Joined Dec 2013
5,148 Posts | 2,761+
US
Similar to when Chinese workers put Americans out of business in the 1990s & early 2000s.
I'm not asking why they didn't relocate their industries to the poorer members of the EEC or later EU. I already know the reason for that.
for the same reason that Mexican workers didn't put Americans out of business: lack of infrastructure and qualification, also corruption, and law deficiency
 
Joined Jul 2020
23,778 Posts | 9,439+
Culver City , Ca
Similar to when Chinese workers put Americans out of business in the 1990s & early 2000s.
I'm not asking why they didn't relocate their industries to the poorer members of the EEC or later EU. I already know the reason for that.
What do you mean by " Chinese workers put American workers out of business"? China imports lots of American goods that employ American workers. Chinese corporations have been investing in the US for decades so not sure about the validity of your argument.
Leftyhunter
 
Joined Jun 2022
768 Posts | 378+
Sweden
Relocating production can be physically difficult. I know that as a manufacturing worker.

The Eastern European EU members have their own consumption to satisfy. The entire market has grown. Western Europe exports its products to Eastern Europe and vice versa.

The newer member states have adopted EU labour and environmental standards. Their employers can't compete by exploiting workers or environment more than in the earlier member states.
 
Joined Jul 2020
23,778 Posts | 9,439+
Culver City , Ca
Relocating production can be physically difficult. I know that as a manufacturing worker.

The Eastern European EU members have their own consumption to satisfy. The entire market has grown. Western Europe exports its products to Eastern Europe and vice versa.

The newer member states have adopted EU labour and environmental standards. Their employers can't compete by exploiting workers or environment more than in the earlier member states.
Plus some Asian corporations have factories in the EU especially South Korea in Poland and no doubt Chinese corporations have ants in the EU and or non EU countries in Europe. So not sure if the Chinese have destroyed jobs or not .
Leftyhunter
 
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Joined Nov 2022
1,445 Posts | 156+
Caribbean
What do you mean by " Chinese workers put American workers out of business"? China imports lots of American goods that employ American workers. Chinese corporations have been investing in the US for decades so not sure about the validity of your argument.
Leftyhunter
American manufacturers lost their jobs because China was able to produce similar products that costed way less.
 
Joined Nov 2022
1,445 Posts | 156+
Caribbean
The newer member states have adopted EU labour and environmental standards. Their employers can't compete by exploiting workers or environment more than in the earlier member states.
But their employers pay them far less than western european employers pay their workers
 
Joined Jan 2021
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Portugal
Evidently the industry of poorer countries was not as competitive in more developed markets. Infact part of the conditions to join the EEC included governments removing support from native industry so it wouldn't compete with EEC industry.
 
Joined Aug 2013
899 Posts | 592+
Finland
I'm not asking why they didn't relocate their industries to the poorer members of the EEC or later EU. I already know the reason for that.
But they did at least to some extent? A lot of Finnish manufacturing companies have done this. Fiskars tools are manufactured in Poland. Nokia initially moved a lot of their phone manufacturing to Romania.

Or are you asking why Fiskars tools are still in the market as Fiskars, made in Poland, rather than a Polish brand taking over the market?
 
Joined Sep 2011
8,999 Posts | 2,990+
I'd say they did. Just not in the way that some Portugese dudes out-comepeted the mighty BMW of Germay with some more cost-effective Portugese alternative. Instead the German cer manufacturers invested heavily in automation (robots), and most of all relocated factories to all these new countries with lower labour costs (like the Czech repub, Hungary etc.)

I get the impression the OP on some level assumes this to be a bit of a zero-sum game? If low-wage countries come in one end, then wages should lower in the richer industrial nations as they "lose" industry to these newcomers. But the EU is set up precisely the opposite way. IF cheap industry production can be done even cheaper in southern or eastern Europe than in western and northern Europe – for western and northern Europe that is also an opportunity. They can get industrially produced consumer goods even cheaper than before – they do not "have" to put part of their workforce on industrial jobs like that. BUT it requires being quick enough on the uptake to 1) allow entire segments of industry (like ship-building or textile industry) to just fall by the way-side, to let the newcomers just have those, and instead they 2) invest in the workforce through more education and qualificaton to 3) funnel them into new and EVEN MORE profitable ventures (robotization, semi-conductors, software, financial services, whatever...).

That way everyone ends up better off eventually – just not at the same time, in the same way, and to the same extent.
 
Joined Sep 2011
8,999 Posts | 2,990+
But they did at least to some extent? A lot of Finnish manufacturing companies have done this. Fiskars tools are manufactured in Poland. Nokia initially moved a lot of their phone manufacturing to Romania.

Or are you asking why Fiskars tools are still in the market as Fiskars, made in Poland, rather than a Polish brand taking over the market?
Yep. Sweden is similar. Massive ship-building and textile industries still in the 1970's. These were allowed to just fail, since the alternative was subsidizing them heavily with tax-money already in the 1980's – to compete with S Korea, Thailand etc. Then in the early 00's Sweden allowed the national car industry to just fall by the wayside. The Chinese got to buy Volvo and SAAB just disappeared. Again the alternative was to use tax money to prop up failing industries that could bot compete with relative low-wage countries like that anyway.

Some industrial sectors in Sweden have been maintained, like the mining and steel industries. However, Swedish steel today is almost all super complex special alloy stuff, that is difficult to produce, require very complex processes, and is produced in quantities where the global demand is higher than the supply – and so Swedish steel manufacturers can demand premium prices. (The US slappes steel tariffs on the EU a couple of times, and every time the Swedish steel makers has concluded it didn't matter, because what they sell is both rare and crucial, and so all that happened was that their US importers just kept paying regardless.)

That is to say, if someone wants to buy bulk-steel generally, it's the Brazilians or Indians they tend to talk to. Otoh if the UK wants to build war-ships, they end up buying fx Swedish steel, which is still steel, just not competing with the bulk stuff. In a way the Swedish export industry model is based on 1) mercilessly weed out the non-competitive, if it cannot be profitable it must fold, and government money won't be wasted on it, and 2) effectively Sweden gets by on producing tings the Germans cannot produce for themselves (or at least not in sufficient quantities) and so can be sold internationally at hefty mark-ups.
 
Joined Jan 2016
1,788 Posts | 344+
Collapsed wave
To put it very briefly: It's not a zero sum game.
Everybody wins something in this case.
 
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Awesome
Otoh if the UK wants to build war-ships, they end up buying fx Swedish steel, which is still steel, just not competing with the bulk stuff.

So if Britain goes to war with Sweden, we're not getting any more warships?
 
Joined Jun 2012
15,528 Posts | 2,868+
Malaysia
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OP question: "Why didn't industries from poorer European countries put the ones in the wealthier countries out of business after the EEC removal of internal tariffs?"

Well, let's just put it this way. If you were the finance minister or economic minister of your own poor European country, are you really seriously going to tell all the businesses in your country to do that to businesses in France, Britain or Germany, let's just say?

That kind of strategy would be like having your own country shoot itself in the foot. Because it's going to damage the economies of those three countries, who would logically have been among the leading buyers of products and/or services from your country.

The EEC, later the EC, eventually the EU, just like any other regional economic grouping, was designed to progressively build up and strengthen the economy of every member state, not just a select few at the expense of the rest.

And it's not meant to be like the soccer football WC either, where only one country can be champion, runner up, second runner up etc. respectively.

Granted, there will be some competition element, but the competition is mainly friendly and intended to improve efficiency, not to destroy anybody. A lot of it is more about mutually benefiting cooperation and collaboration, rather than sheer cut-throat dog-eat-dog competition.

Prosper thy neighbour, prosper thyself, then everybody will grow wealthier. Now, that is really the order of the day.

Tariffs have a trade restricting effect. So, removal of tariffs should rightly and logically create a trade boosting effect. For everybody in the grouping.

Well, at least that is the way I understand it, anyway.
 
Joined Jun 2022
768 Posts | 378+
Sweden
Then in the early 00's Sweden allowed the national car industry to just fall by the wayside. The Chinese got to buy Volvo and SAAB just disappeared.
Volvo Trucks is still Swedish owned. Geely of China only bought the much smaller passenger car division and even that is still located in Sweden. Ford owned it briefly in between. The car industry didn't fall by the wayside.

Saab Automobile was a much smaller company to begin with and had never been profitable.

These are minor points however. I agree with your main thesis.
 
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Joined Jun 2022
768 Posts | 378+
Sweden
American manufacturers lost their jobs because China was able to produce similar products that costed way less.
That is one reason but not the only one. Shrinking US defence spending post-cold war also contributed to a loss of manufacturing work. US automotive manufacturing lost market shares due to its own mistakes.
 
Joined Nov 2022
1,445 Posts | 156+
Caribbean
Well, let's just put it this way. If you were the finance minister or economic minister of your own poor European country, are you really seriously going to tell all the businesses in your country to do that to businesses in France, Britain or Germany, let's just say?
No. but they'd want to do it anyway.
 

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