New EU “Made in” regulation: Do consumers benefit or is it protectionism?

On thursday, the EU Parliament voted to approve new labelling laws that shall ensure more transparency about the “country of origin” of products. The changes can be summed up as follows:

“When the legislation is finalised, likely next year, manufacturers must specify the country where the majority of their product was originally made on the label. … Currently, foreign manufacturers can claim a product was ‘Made in the EU’ when it only underwent minor assembly in the bloc. That could mislead consumers who are looking for local craftsmanship or want to support local businesses.”

This attempt to harmonize might be a step forward, as companies cannot make false claims about the origin of their products anymore. But does the system really “help” consumers, as the EU parliament titled?

It might help them to promote the economy in EU countries, but what else? What benefit do I as a consumer have, if I know that my product was produced, e.g., in China or Bangladesh – as opposed to a EU country plus Turkey?! Should I avoid products that were produced in China? I think that such information only enables consumers to discriminate against whole countries on the grounds of very general information – this smells like protectionism. I am not a fan of the WTO, but is the legislation according to the WTO rules?

Instead, the EU should work towards a legislation that provides consumers with detailed information, which would be of some use to them. A good examples is Switcher’s Respect-Code or the Eco-Index. A label would not need to include all this information, but it should refer to an online database that tell us in which factories products were produced; in some years time this website could also benchmark the factories in terms of social and environmental issues. This would really help consumers to make their choice and, at the same time, it could encourage a race to the top.

The very nice label on the left was designed by Peter Lee.



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