Spreading liberté

Here’s hoping we learn something from the French.

Francois Loos, the foreign trade minister of France, has an interesting way of opening a speech. He sees the values held dear by his country — liberté, egalité, fraternité — in the colors of the French and Philippine flags.

And he envisions French companies helping spread those values of freedom, equality and brotherhood around the globe by being Number One in their respective fields.

The French will not like it, but the spiel reminds me of a certain American official whose foreign policy is anchored on the belief that spreading freedom around the globe will ensure his nation’s long-term security and prosperity.

Loos is happy to point out that in at least one field, a French-dominated company has bested the American competition. Airbus Industrie is now Number One, ahead of Boeing, Loos reminded Philippine and French businessmen at a "joint networking luncheon meeting" in Makati the other day.

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The French foreign trade minister, who leaves Manila today at the end of a three-day visit, is on an Asian tour to promote his country’s products and, as he said, the values that they cherish.

Sustaining economic growth and being at the top of their game, he admits, have become more challenging in the face of stiff competition posed by cheap labor in other countries.

How do French companies compete? In the age of globalization, what is the engine of growth? The questions were addressed to French expatriates in Manila and the high-level delegation of 20 French businessmen accompanying him in his Asian swing. Also listening to Loos were Filipino businessmen, most of them members of the Makati Business Club.

Loos said French companies must compete and lead in their fields and create French jobs, which will increase buying power and fuel growth. Let people enjoy the fruits of economic growth, he said.

He emphasized the need for substantial investments in research and development, which have made Airbus Number One. To increase capitalization and raise the necessary funds for R&D, French companies are merging.

Airbus is in fact a European success, with several countries investing in the undertaking to compete with the Americans. Washington’s complaints about European policies that are biased for Airbus remain unresolved.

There are in fact numerous complaints, and not just from the Americans, about French and European subsidies and protectionist policies for their agricultural products. The French will have to address those concerns if they want to lead by going global, as Loos puts it.

Like the Americans, the French like to put an altruistic face to their objective of being Number One. Loos indicated his government’s openness to proposals for a so-called international tax that will be invested in infrastructure, health, education and other projects in developing countries. This will be on top of development aid programs that France already has in several countries including the Philippines.

In contributing to such programs, French values will also spread, Loos said, as he exhorted his compatriots in the audience to work for the "global growth" of both the Philippines and France.

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Many industrialized countries have given up trying to compete with cheap products churned out by China and India. There is simply no way that workers in France, spoiled by state entitlements, or workers in the Scandinavian countries will toil for the kind of pay and conditions that impoverished Chinese are willing to accept.

Instead these developed countries are pouring massive investments into R&D and leading in the manufacture of high-tech gadgets such as cell phones and computers. They are cornering niche markets in areas such as medical equipment, and the luxury goods market from apparel to automobiles.

They will have to keep their eyes wide open because the competition is aiming for Number One in everything. For now many Chinese are content with churning out cheap knockoffs. They are even passing off insipid-tasting Chinese truffles for the real thing – those mushrooms harvested in France that are highly prized by food lovers – to the annoyance of the French.

To speed things up a bit, however, the Chinese are importing talent, from scientists to engineers, designers and agriculturists, to give them the world-class products that they want.

They are now selling cars proudly made in China and are preparing to compete in aviation, telecommunications and other high-tech fields.

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France wants to spread liberté, egalité, fraternité, with a little help from its business community. The Bush White House is busy spreading democracy, also with help from American investors.

Most of our businessmen are busy just trying to keep their heads above water. Between countries like China that have a lock on cheap exports, and countries like France and the United States that are leading in technology and the high-end consumer goods market, where does the Philippines stand?

The local apparel industry has been strangled by foreign competition. The furniture industry, which has world-class designers, can still compete. But even our designers are being pirated by Chinese companies, according to one of our biggest furniture exporters, Frocy Pascual of Golden Cane manufacturing. Pascual, who was at the luncheon for Loos, has 2,000 workers and exports an average of 200 large container vans of furniture every month. She plans to expand her company’s presence in France and the rest of Europe, where tropical Philippine designs are popular.

But she told me that the Chinese are quickly catching up. With state support and cheap labor, a typical furniture manufacturer in China can easily export 2,000 container vans of its products every month, Pascual said. The competition is killing smaller furniture makers in the Philippines, she said, and several Philippine designers have already moved to China.

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In other sectors, our industrialists are aware of the advantages of mergers and partnerships with foreign companies for bigger capitalization. Several of these partnerships, however, have turned sour, with foreign partners losing their shirts and vowing never to return to this country.

Very little goes into R&D, with businessmen preferring tested marketing formulas, transfer of technology or simply copying what’s already in the market.

Unless we develop a grander strategy for our industries, we will find the market for Philippine goods shrinking steadily, and our country always a bit player on the global stage. We will never be on a mission of spreading our dysfunctional democracy around the world. Instead we will always be busy just trying to survive.