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00:00Tesla sales fell by 76% in Germany. Tesla owned by Elon Musk, who's been cheerleading for the far right in Europe.
00:09With across the continent now, calls by activists to boycott U.S. made products.
00:16It's a report by partner station France 2, read by August Hackinson.
00:21Edouard Rosé is a hop farmer in northern France. A few days ago, he started a group on a social platform, aiming to boycott American products.
00:34We are promoting French alternatives. Everyone can show support for one another. People have been shocked by recent events.
00:48Over 4,000 people have joined his calls online, a movement sparked by the intense dispute between Ukrainian President Zelensky and Donald Trump.
00:58As a European, I feel humiliated and attacked. I had a terrible day watching that video. I kept thinking, what can we do? We are really under the heel of the Americans.
01:09Throughout Europe and in different languages, calls for a boycott are multiplying. This Swedish group has gathered 40,000 members.
01:18And in Norway, the largest port operator has announced it will immediately stop fueling American ships.
01:25But the question is if European consumers can truly live without American brands, which are very present on the continent.
01:33In France, for example, most American products are made locally. Three major agri-food giants, Mars Coca-Cola and Colgate-Palmolive, operate 15 factories in the country, employing thousands.
01:46Consumers are divided over the boycott.
01:49There may be other ways to address this than the boycott. Personally, I don't have immediate solutions, but it's the first thing we think of and act upon.
01:58However, I'm not sure what the outcome will be.
02:02Last month, carmaker Tesla saw a 45% drop in sales in the EU after its CEO Elon Musk intervened repeatedly in the politics of Europe and made several controversial statements as well as a Nazi-like gesture.
02:18And for more, we're joined by John Denton, Secretary General of the Paris-based International Chamber of Commerce. Thanks for being with us here on France.
02:26Thanks very much for having me and happy International Women's Day.
02:29International Women's Day, March 8th, coming up in just a few days.
02:32Let me ask you, John, these calls to boycott U.S.-made products, what's your reaction?
02:38Oh, it's crazy. I mean, let's get focused on what the real issues are here.
02:43I mean, let's have a look at the context.
02:45Only 13% of global trade is actually issued from the United States of America, which means that 87% of the rest of the world is able to function effectively and wants to function effectively under the rules of a multilateral trading system, a system that's enabled them to economically prosper over many, many years now.
03:10We've got to make certain that this doesn't turn into a discussion about retaliation, retribution, reprisals.
03:18It turns on what is really important, is how do we preserve the fundamental basis of economic growth, which is a functioning multilateral trading system.
03:28So calls for boycotts, they're sideshows.
03:31The real issue is how do we revitalize the system for the 87%, including Europe, including Africa, including Asia, the Middle East, Latin America.
03:41That's what we really need to focus on here, not calls for boycotts.
03:44Yeah, but it's difficult because we're talking about the world's number one economic power, the United States.
03:52And recently you attended a G20 finance summit in South Africa that the new administration passed on.
04:00Multilateralism is out?
04:02Well, let's be a little bit more accurate here.
04:04Yeah, I was there and there was U.S. business there, but also the chairman of the Federal Reserve was there.
04:12So the U.S. was present on an important aspect of the G20 process, which is about financial stability.
04:19And, of course, when you have the chair of the Federal Reserve, it's a pretty serious conversation.
04:24So the U.S. was engaged in that.
04:26We actually take very seriously the G20 because the G20 is an instrument or a bit of global architecture that helps focus on priorities for driving economic growth.
04:37We're actually very excited about the South African leadership.
04:39And I do know the calls or the statements that have been made for boycott are part of that by the U.S.
04:45But let's see where this gets to during the course of the year.
04:47It's early days yet.
04:48The South Africans have a very ambitious agenda.
04:51And let's not forget, this is the first time ever the G20 has been held in Africa.
04:56South Africa has an agenda for Africa, which is really important.
05:00But where does it all go if the U.S. Treasury Secretary doesn't show up for that meeting?
05:04He was supposed to be the star of the show for the United States.
05:07And if you have a situation where a U.S. president doesn't really like...
05:12What you're suggesting there is that the rest of the world has no agency without the U.S.
05:16That is absolutely not the case.
05:18The reality is we've seen this before.
05:20I mean, many years ago, there was a movement to create the Law of the Sea Convention, which the U.S. was part of.
05:27But aspects of that to do with what was called the New International Economic Order offended parts of the U.S. polity.
05:33And it became an election issue.
05:35And Ronald Reagan at the time said, the first thing I will do when I become the president of the United States is withdraw the U.S. from the Law of the Sea Convention and fire the ambassador.
05:44He did both.
05:45And yet we continued on the rest of the world and we created the Law of the Sea Convention.
05:49And guess who relies on that, even without ratifying it, is the U.S.
05:53So the rest of the world, the 87 percent who are not involved in the current drama between the U.S., Canada, Mexico and China can continue on.
06:04And those parties, Canada, Mexico and China, need to be part of this coalition moving forward to revitalize it.
06:11And in the end, of course, we want to make certain that the U.S. can align economically because it's in everyone's interest for it to do so.
06:18And it's in the U.S.'s interest as well.
06:20They are a net player and a very important player in economic opportunity.
06:25We want to make certain they're fully engaged in the global world.
06:28It's very difficult to unwind the value change that have driven a lot of the success of the U.S. companies over the last 30 years.
06:36And we'll find that will be one of the hardest things to do because they've actually relied on the law of comparative advantage to build their economic model.
06:44But are we headed towards a race to the bottom on regulation?
06:47And we see it more specifically in the case of the sort of a Trump effect, some are calling it, here in Europe with a pushing back, a relaxing of environmental targets.
06:59Well, that's an interesting issue.
07:01I mean, I don't see, I mean, I live in Paris, but I don't see the polity arguing for a lessening of standards.
07:08What they want to do is get the balance right all the time.
07:10And I think it would be widely accepted that there's been an overbalance towards regulation.
07:16I think one of the interesting elements is that when you face, I think, the challenges that Europe is having at the moment, particularly what may happen with the U.S.,
07:25rather than retribution, rather than using the big bazooka, as Mario Draghi said, let's have a look at what we can do ourselves in terms of creating a more competitive Europe.
07:34Why, for example, would Europe do anything other than seek to engage right now with Mercosur?
07:39That will open up a whole new market.
07:41Why isn't Europe proceeding at pace with developing the relationship with ASEAN, another huge market?
07:48There's lots of opportunity out there.
07:49But if we see the world only in a binary fashion, Europe v. the U.S., then I think the Europe will not be able to move to become the leader it actually wants to become in economic development and security affairs.
08:01But it requires it to become as competitive as possible.
08:04And that doesn't mean low standards.
08:06That means getting the balance right on what the standards and regulations should be.
08:09Well, the French, for instance, are among those resisting this trade deal with South American nations.
08:16And they're doing it because they're under pressure from their own farmers who see themselves being undercut by South America.
08:23Yeah, but I mean, what this moment does is create an opportunity to refresh that thinking.
08:28Because what is the greater good here?
08:30Is it actually being stuck in a binary problem in terms of what will happen out of the U.S., final decision, what happens with Europe?
08:37Or you should be now showing the agility to find new markets.
08:40There's a new market waiting right now.
08:42And there's net winners from that.
08:44I think all the economic modeling shows that Europe is a net winner.
08:47And European consumers are net winners out of a Mercosur agreement.
08:52So, John Denton, a word on the members of the International Chamber of Commerce.
08:56A lot of them are small businesses.
08:58Well, let's be clear.
08:59And thanks very much for having us because it's really important for us to have the opportunity to share some of our views.
09:04I mean, we're in 170 countries.
09:06Seventy percent is in the global south, okay?
09:10One of the things to know about the ICC is that we actually enable economic activity.
09:14So, we're not observers.
09:15We enable $17.5 trillion worth of economic activity.
09:19But we do that in a way by creating the rules and the standards that allow businesses to actually function and prosper.
09:27And those businesses, millions and millions of them that are part of the ICC are small, medium enterprises.
09:33And they're not just from advanced economies.
09:35As I said, they are from Africa.
09:37They are from sub-Saharan Africa.
09:39They are from Latin America.
09:40They are from the South Pacific.
09:42So, we worry about those businesses and what this period of uncertainty may do for them.
09:47But let's be clear as well.
09:48Most businesses are just getting on with doing business day in, day out and trying to make a living.
09:54What kind of message does it send to those small businesses who are vulnerable to bigger ones?
10:00When you have a U.S. administration, the dollar is the world's currency,
10:04the U.S. administration saying it's no longer going to pursue prosecution under the Foreign Corrupt Practices Act.
10:12In other words, we're not going to worry about bribery.
10:15Well, let's not mix too many things here.
10:18I can come back and talk about that in detail.
10:21But what I'm saying to businesses there and which is really important is that what is enabled to-
10:26Rule of law is my question.
10:28Rule of law is very important, but rules are what's really important.
10:32What has allowed your economy to move forward has been access to the multilateral trading system.
10:39What you may not know is that the people who will be hit hardest by the erosion of this system are actually African people,
10:46Latin American people, South Asian people.
10:49It's the vulnerable we hit because people forget that the multilateral trading system has been the greatest tool for economic development.
10:56So what's the trend that you're witnessing?
10:58Is there a move towards more rule of law in the developing world or less?
11:03There's certainly a move towards looking at the multilateral rules that govern trade and finding a way to revitalize them,
11:11to make them relevant, to ensure that they enable the prosperity that people want.
11:15And that's what the ICC is coalescing in the economies about.
11:18I'm happy to talk about the FCPA because I think there's-
11:21Foreign Corrupt Practices Act.
11:22Yeah, there's actually detail around that as well.
11:25That is not an executive order.
11:27That was a memorandum just so people are very clear.
11:29It's just telling the Justice Department, don't go chasing that.
11:32Yeah, but don't forget there's actually statute of limitations as well.
11:34So there's some very interesting dimensions here.
11:38This has not been a removal from it because I think in the US,
11:42there's a fundamental understanding that one of the most attractive aspects of the American economy is the strength of the rule of law.
11:50And I think that that's something that we should all be very, very cognizant of.
11:54Which brings us back to a remark you made at the beginning, which is the argument for free trade,
11:58how we need to make that effectively.
12:01Let's take a listen to Canada's prime minister on Tuesday after Donald Trump slapped those 25% tariffs.
12:08I think the question that we all need to be watching closely is, what do the American people think?
12:18How do Americans feel about jettisoning one's friends and allies in favor of a country that has never wished Americans well
12:33and continues to act in ways that harm the global economy and specifically the American economy and American values and principles?
12:44John Denton, at what point do we graduate from talking about business to talking about values and principles, as Justin Trudeau puts it?
12:52Do you agree with what he says there?
12:54Well, I think the reality is extremely complicated for Canada and for Mexico.
12:59What is really difficult to discern here is, what is the end game?
13:04Is it we're just simply watching a slow motion collapse of a regional trade agreement, which is the USMCA?
13:11Or are we watching something greater?
13:13At the moment, all we can actually rely upon is what we see and what people say and what people do.
13:19What is very clear is that the USTR put out a statement yesterday morning in its outlook,
13:25saying its whole intention is to rebalance the US economy to make more prominent manufacturing.
13:32Now, I have to tell you, that is actually not novel.
13:35That was actually Joe Biden's policy as well.
13:37So is that what we're seeing here?
13:39Is that what we're seeing here by the US, is actually an attempt to actually reorganise the way in which industrial production takes place in North America, including with Mexico?
13:49That's what we're trying to understand at the moment.
13:51Is the rest of it just noise?
13:53I don't know.
13:54But what we can say is what we read and what they have stated as fact, that their intention is to rebalance the US economy.
14:01They're simply going about it in a way which is causing a lot of unnecessary grief for businesses, families and communities.
14:08And that's what I think you hear from the Canadian Prime Minister.
14:11What else can the Canadians do?
14:13What else can they actually do?
14:15So the issue for them is how do they reorient their economy?
14:18They have tried over the last 10 years, and you can see some progress there.
14:22But they're still heavily weighted because they are integrated.
14:25And, of course, that is one of the challenges even for the US policy, to recalibrate towards more manufacturing in the US,
14:33that the actual systems that have been set up over many, many years that people from the US, Canada and elsewhere have invested in cannot be easily undone overnight.
14:43So how long will these tariffs last?
14:45Very briefly, John Denton, because we're out of time.
14:48You talk about we're waiting to see if it's just noise.
14:51In the meantime, how much is that impeding fresh investment?
14:55Oh, well, look at the reality just very simply.
14:59Look at forward orders in the US.
15:01What you would have seen in the last month has been a spike because what people clearly have done has been actually bring in to get reserves in place.
15:08But you actually look at the index there, the actual forward orders are diminished.
15:14That tells you there's a lack of confidence there.
15:16But you've got to also understand that the US economy is fundamentally a services economy.
15:24I mean, trade only makes up a much smaller percentage of the US economy than it does in most other countries.
15:31I mean, in most other countries, it's 60%, 70%.
15:34In the US, it's around 30%.
15:36So I'm saying that because it's important because a lot of what people are hoping for here that the way it will be magically fixed, well, the markets will turn.
15:43The markets may not.
15:45The markets may not.
15:46They may price in.
15:48They may price in the actual disruptions we've already seen.
15:51But what they may also be having an outlook for is the reality that this may recalibrate.
15:55It depends what happens with tax cuts.
15:57It depends what happens with currency.
15:59There's a lot of things at play here.
16:01And it's only six weeks in.
16:02John Denton of the International Chamber of Commerce, thank you so much for being with us here on France 24.
16:06My pleasure.
16:07Thanks for having me.
16:08Stay with us.
16:09There's much more to come.
16:10More news plus a day's business and in sports, Paris Saint-Germain against Liverpool in the Champions League.
16:21.