Time for a New Era in World Trade

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Dr Adrian Haack, Director, India Office of the Konrad-Adenauer-Stiftung, was the Guest of Honour at the MMA 66th Annual General Meeting.

It is a great pleasure for me to attend MMA’s Annual General Meeting and Awards Ceremony—my first official conference—as Director of the India Office of the Konrad Adenauer Foundation. Our partnership dates back to 1989. We say in Germany that ‘Management is like a bicycle. You need to move forward, otherwise you will fall off.’ The world has been experiencing a pandemic for the last few years. This pandemic is perhaps the only event in all of human history that we have ‘all’ experienced. We were prisoners in the Corona pandemic. We can only hope that this time is now behind us. We’ve all seen globalization take a break, travel becoming impossible, supply chains getting broken and how vulnerable we are when we depend on China. We’ve all seen China trying to cover up its role in the pandemic. There are many people in Europe and also in India who say that globalization has had its day; global trade was a mistake and that national markets are the future. I do not believe that. I believe that after the pandemic, a new era of world trade will begin. For the past three decades, China has been like a magnet that has attracted capital, production and resources. China copied what could be copied. It has flooded the entire world with its products. The Indian government has already drawn the right conclusions and has become more independent from China. This lesson has now been understood in Europe also.

Don’t Get Walled In

But we shouldn’t make the mistake of walling ourselves in. It’s one thing to protect yourself from Chinese dumping, and it’s another to be generally closed to the world. The KAS is the foundation of market economy. This is our story, our heritage and our DNA. After the Second World War, Konrad Adenauer and Charles De Gaulle started European integration. They believed that a common market should help rebuild the continent after the war and prevent new wars. This project was a model of success. The European Union is now a fully integrated single market that works great. Train from Munich to Madrid is like from Delhi to Chennai. In economic terms, Europe is one country. Polish car seats and Italian windows make the globally popular German cars competitive.

The countries of the European Union are the most important trading partners for the German economy. In short, the European Union is the basis for prosperity in Germany. Free trade is the basis of German companies. The last 70 years have shown that free trade can be a win-win business. It’s not that some European countries have advantages and others have disadvantages. Some are more successful than others, but all are successful. All states that have joined the European market have benefited from this. Look at Poland, for example. Since its accession in 2004, the country has had rapid development. An Indian businessman told me that it doesn’t work in Asia and India wants to protect itself from Chinese dumping. ‘When you join a common market, the Chinese products will be simply relabelled there.’ He’s probably right. But why do we think in terms of continents? Digitization and modern logistics have brought us closer together. Why don’t we try to implement simple FTAs? Then we can build trust and we can expand the agreements. The EU started with the steel sector. At that time, there were just six states. More and more states followed. Coal, agriculture and other industries followed. What can prevent the fact that in 2050 there will be a common market from Los Angeles to Berlin to Seoul to Sydney to Chennai?

Cognac Shows the Way

Konrad Adenauer did not have the idea for the European market. It was a Frenchman named Jean Monnet. His father was a cognac dealer. He sent his son to Germany to sell his alcohol there. Monnet knew that the Germans drink even more than the French. He became very successful and found a lot of loyal customers. Then the First World War broke out and the business stopped. He resumed trading after the war. Even the Second World War could not harm his idea. The fact that Monnet failed twice because of two world wars shows us that every idea has its time. The world will not grow together tomorrow or the day after. But it will and become small, closer and even more interdependent. In Europe, 500 million well paying customers are waiting for your products. Most of them don’t know about it yet, but that’s exactly what a good businessman can change.