So far in the course we have examined the political, legal, cultural, and technological implications of doing business on the global market. We have also examined instruments of trade policy (e.g. subsidies, tariffs, local content requirements).
We have discussed some trade agreements and also studied regional economic integration.
So, for your mid-term, I want you to apply that information to a real world scenario.
Assume you are a U.S. company that manufacturers luggage. Due to rising labor costs, and the need to cut operating costs, you have decided to make your luggage in Mexico. Because the U.S. has a trade agreement with Mexico,the North American Trade Agreement (NAFTA), you need to consider its application, identify advantages, disadvantages, and determine any operating risks.
Using the internet, analyze and evaluate the requirements of NAFTA as it relates to a U.S. Manufacturer.
Prepare a short paper which explains the following:
1. Introduction. A background of your company to include a specific description of the luggage. For example, is it wheeled, carry-on, or of another design. What is it made of? What is the price point? Who is it sold to?
2. Application of NAFTA. To import the product into the U.S. and apply NAFTA, what must be done? For example, where do you source the raw material? What are the requirements of the trade agreement to make it 'NAFTA eligible'? What would be the suggested tax (look up the tariff number and figure out the tariff rate - I need to see all of the digits!) * Hint: You might wish to consult a NAFTA Guide which you can find online that should assist you in how to apply the requirements of the trade agreement.
3. Closing: What risks, advantages, and disadvantages face you? Simply discuss and explain what areas you have identified and why.
As you develop your submission, consult you book and incorporate terms and concepts from the chapters.
Your paper may be in any format as long as it is double-spaced, presented in a 12 inch font, and is in Word. You may submit any length you feel is necessary but as a general rule, you should consider having 3-5 pages and 3 outside sources