Coat of Many Countries

1121 WordsOct 23, 20055 Pages
As we live in a global economy we can no longer rely on the clothing labels promising a product made in Italy or elsewhere. Products are produced wherever the costs are the lowest whereas the quality stays the same or is even better. It is not surprising that the production of coats is no exception to this international trade phenomenon. A documentary video, which we have seen during the lecture of the international marketing class, shows impressively how international trade functions and how businesses and even nations are affected. At the MAGIC Show in Las Vegas, where producers present their newest textiles and coat makes to a retailers audience, we have our first insight in the clothing industry. It is obvious which countries play…show more content…
Impressed by this worldwide supply chain and the international entanglement of markets we now want to discuss some of the bases of global trade, its implications and the advantages and disadvantages of such an evolution. The major reason behind international expansion and the import of goods is the search for minimum labour cost at a certain quality level or the highest quality for a certain price. Products are bought from the best and cheapest producers whereas transportation costs often play a secondary role. Domestic producers, paying wages many times higher than in developing countries, cannot always fulfil the requirements. Products, which only require low skilled workers, are already produced and imported from abroad since many years. Moreover, as the workers in low-wage areas gets more educated, foreign companies challenge more and more the local white-collar workforce. Isn't this evolution a major threat to our local labour market? From an economic point of view, we cannot support this hypothesis. Free trade allows nations and companies to specialize themselves in producing goods in which they have a comparative advantage over others. Other goods, in which a nation lacks in efficiency, should better be imported than domestically produced. This specialization helps to further improve productivity, reduce the prices for products and hence, increases the overall live quality of the citizens. On the

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