GLOBAL MARKETS, REGULATION & PROTECTIONISM

In the following section, the focus on the business intelligence report is on the new threats linked to protectionism when all companies adopt the same strategies on increasing their exports.

Until the 1980s and the Lost Decade, there were different strategies to expand worldwide.

US firms the American way of life to all Western countries through Marshall Plan coupled with a strong development of their internal demand. Western EU countries decided to cooperate regionally after two World Wars to create the EEC and then the EU. Regional exports and internal demands were powered. USSR and its satellites focused on industrialization without enhancing their internal demand, what led to their collapse In Latin America and Africa, the main strategy was related to import to substitutions by creating local champions using the real negative interest rates until Paul Volcker became the CEO of the American Federal Reserve and provoke an increase of the real interest rates and the crisis of the debt in 1982. In Asia and in Germany, they focus on export led growth from the end of World War II copying Japan.

As it was a proven recipe, first all Asian and then all countries have adopted this strategy. But it is not without risks… above all if the internal demand of the boosting economies in terms of GDP becomes close to the rest of the world or if many restrictions through regulation appear.

First, it has to be said that even though countries were not eager to vehicle protectionist measures, the constant focus on export solutions cannot be a successful strategies for all countries. Therefore, it can be consider in the midterm as a flight forward solution.

It is even worse: the fact that the main strategists realized the extent to which the margins of manoeuver related to export solution are lower than they seem, the ability to design new protectionist solutions and new regulatory policies in the short term become always more relevant.

The ability of your company to discern as soon as possible the consequences of these new challenges will force you to modify your strategy and to lobby the interests of your firm adequately.