BUDAPEST: Europe’s luxury fashion is recognised as one of the West’s most potent mechanisms of soft power. From state banquets where prominent leaders brandish high fashion as diplomatic statecraft to runway shows at the Great Wall of China and Gyeongbokgung Palace, European luxury houses project an image of timeless heritage and unmatched prestige.
This projection even surfaces in anti-Western North Korea when Kim Ju Ae, daughter of leader Kim Jong Un, appeared in state media wearing a US$1,900 Christian Dior jacket while strolling in front of an intercontinental ballistic missile.
Yet beneath the cultural dominance, a supply chain reckoning is emerging. Mandatory environmental, social and governance rules are being enforced, while court investigations are exposing extensive outsourcing, resulting in a widening gap between European brand prestige and global manufacturing realities.
This tension stems from international trade regulations that dictate origin labelling. Under Article 60(2) of the European Union Customs Code, a product legally qualifies for a “Made in (Country)” origin label if its “last substantial transformation” occurs within that country’s borders.
Guess WordCrack the word, one row at a timeBuzzwordCreate words using the given lettersMini SudokuTiny puzzle, mighty brain teaserMini CrosswordSmall grid, big challengeWord SearchSpot as many words as you can Show More Show LessThese non-preferential origin rules allow brands to carry out primary manufacturing in Asia while performing minimal final operations – such as attaching a zipper or sewing a logo – within Europe.
This is known as the “made in” loophole because the regulation does not check how much work was actually done there. Compliance oversight is largely administrative because national customs authorities rely primarily on self-declaration by brands rather than conducting physical tier-3 supply chain audits.