Jorge Candeias (Fearless Blue)
| Monday, November 01, 2004 - 02:29 am |
That sounds pretty much right, except for one thing: you should not use that MAX thing, since it may happen that production costs of a given merchandise inside your country are substantially larger than in faraway countries, thus making distantly produced goods cheaper than your own. This is what happens in the real world, with products made in Asia arriving to Europe and the US cheaper than products made locally, because they have far smaller production costs - especially the costs with manpower. If you scrap that MAX, you'll have the model following the same set of conditions: countries with very low wages continue to be competitive in the global market even when selling in long distances (although they may not be selling anything in long distances, because their neighbors will probably absorb the whole production). If you decide you prefer to buy from your own companies, for strategical reasons, you can always sign contracts.