Spanish shoes

[jcusey]

This was brought to mind by montecristo#4's post about his newly-purchased Yanko loafers. I've been told that Spanish-made shoes are often available at attractive prices because the Spanish government subsidizes the shoe industry substantially to help it compete with the Italian one, which is much more developed and mature. Anybody know if this is accurate?

 

[bengal-stripe]

I do not think it is legal under current EU (European Union) legislation, for a member state to give state subsidies certain industries (be it shoes, cars or steel etc). If an industry in a certain country is not viable, it might well go to the wall. (That does not mean that states never give underhand illegal subsidies, but if they are found out, they face huge fines.)

Don't forget, there is probably a large shoe industry in Spain, which produces cheap products for domestic consumption.

I believe the distinct advantage of Italian manufacturers (this applies to textile, but maybe shoes as well) is their enormous flexibility. They can produce relatively small runs in the design and specifications of your choice. That is the reason why virtually all top-designers have their production made in Italy.

 

[RIDER]

Interesting question/point. I can say that, for the last few years, the Spanish Trade Commission has greatly increased the Spanish shoe factories participation at the Italian shows. Also, they participate in a broad advertising program and seem to have alot more organization than in the past. BTW, the Spanish shoes, as I posted before after returning from the March show, are really closing the gap with the Italians as far as quality and flexability are concerned. If this is connected to government assistance, I don't know.

 

[MilanoStyle]

I believe the distinct advantage of Italian manufacturers (this applies to textile, but maybe shoes as well) is their enormous flexibility. They can produce relatively small runs in the design and specifications of your choice. That is the reason why virtually all top-designers have their production made in Italy.

Hmm .. I noticed that even a top designer such as Armani now moving his knits and casual products out from Italy manufacturing. Also Zegna is doing some casual stuff out from Italy. I expect others soon to follow.

 

[LabelKing]

That is the reason why virtually all top-designers have their production made in Italy.

Even the English frims such as Vivienne Westwood have their things made in Italy it seems. I suspect YSL, McQueen is made in Italy because they are owned by the Gucci Group.

 

[brescd01]

I do not believe that subsidies are illegal in the EU system. Huge portions of French agriculture are subsidized for instance. The European Union is a treaty essentially granting most favored nation status to its members. A subsidy cannot be selective furthermore (not for EU but for other countries) because it precedes the export. A tariff, however, can be selective.

 

[jcusey]

I do not believe that subsidies are illegal in the EU system. Huge portions of French agriculture are subsidized for instance.

Agriculture is a different beast from manufacturers. Then again, I know that Boeing has always complained that Airbus gets explicit or implicit subsidies from the EU. In any event, even if shoe subsidies were permitted under EU rules, I would have thought that they would be prohibited under WTO rules. But I'm pretty ignorant about this. Perhaps if a international trade lawyer or Eurocrat or Spanish shoe manufacturer happens by, he can set us straight.

 

[armscye]

Your confusion is commonplace. Truth is, the EU concept and the Maastricht treaty are not about competition among European nations. They were created to keep cheap Asian goods out-- by lowering intra-European tariff and regulatory barriers and stabilizing all the weak currencies against the powerhouse deutschmark. Interestingly, the "rules" said the Euro would not be activated as a currency until all the original signatories met certain standards for currency and central bank stability. Guess what? Every country other than Germany got a waiver when they could not cut the mustard.

There are subsidies and there are subsidies, and most assistance is unregulated. Airbus is a glaring example. Another case: When Saab was struggling to deal with rampant absenteeism ten years ago, the oh-so-generous Swedish government stepped up and built them a new factory in a different (supposedly harder-working) part of the country. Is that a subsidy? Not technically, but it sure didn't hurt.