Fools Rush In | Global Trade Magazine
Soundings
  February 10th, 2016 | Written by

Fools Rush In

I can’t help but think of the song title “Fools Rush In” when considering the stampede of European companies eager to invest in Iran. Peugeot wants to ante up 300 million euros to start building cars in Iran. Italian companies have inked deals with Iran totaling $18 billion. And that’s just for starters. Iran’s President Rouhani is just ramping up his European dog and pony show and is scheduled to ink billions more with French companies in the weeks to come.

Really? I don’t get it. Next to North Korea, Iran is probably the world’s most untrustworthy regime. And this one takes the cake. … French airport operator Aeroports de Paris and Bouygues SA are expected to design and construct a new terminal at Tehran’s Imam Khomeini International for “expanded tourism opportunities.” The name says it all. Who’s going to plan a vacation in Iran, which has a history of snatching people off the street and holding them for ransom? Lest we forget, following the 1979 revolution, Iran nationalized all companies. With that in mind, here’s an axiom to consider: History repeats itself. Or as Karl Marx restated it, “History repeats itself first as a tragedy, second as farce.” To these Italian and French companies I have only this to say: Good luck.

No one is more bullish on free trade than us. But don’t expect the 12-nation Trans-Pacific Partnership that the U.S. is expected to sign shortly to do much of anything to help U.S. workers. In fact, a recently released report states that up to one-fifth of U.S. manufacturing jobs could be replaced by an increase in cheaper exports from Vietnam and other low-income countries in the bloc.

Recalling Nancy Pelosi’s famous words, “We have to pass the bill so that you can find out what is in it,” the Obama Administration has tried to keep details of the proposed trade pact a secret, much as it did with the healthcare law. From their perspective it’s understandable. The proposed trade agreement plays into his mantra that America has exploited the world so it’s only right that we level the playing field for all countries because when it comes to capitalism, no good deed goes unpunished. Thank you sir, may I have another?

Like it or not, the climate change debate is only going to intensify as we march into the remainder of the 21st century. Multinational companies that don’t play ball, or are perceived as not doing enough—fast enough—to reduce their greenhouse emissions throughout their supply chains could find themselves shut out of some European markets. If your strategy is to let the early adapters with deeper pockets figure it out and then emulate them later, then that’s your strategy. But you may find yourself implementing it at a cost of eroding market share.

Amazon is taking the first step to become a China Trader but—for now—not the kind that used to own its own fleet to carry its own goods. In a move to give the company more control over the goods it imports from Chinese factories, the online retailer is registering to become a NVOCC. Interesting move. Can owning or leasing their own container ships be that far behind their reported plans to lease up to 20 Boeing 767s to handle their own air freight?

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