Costs vs Benefits --- An Evolving Debate International Law and Economics International Trade: Costs vs Benefits --- An Evolving Debate https://www.youtube.com/watch?v=DGeTZ4u2jbg https://www.youtube.com/watch?v=mSXmB_my0ls https://www.youtube.com/watch?v=pug7BWOYBjw

International Law and Economics International Trade: The Costs of Trade Offshore Outsourcing - Hiring service providers where labour costs are lower. - Sometimes call “contracting out” (internal production moved to external production) - Secondary Industry - Manufacturing – Clothing Industry – initial example. - Tertiary Industry – Service Industry – Offshore Call Centres – recent (internet) example - Questions about Job Loses? ---- What Kind of Jobs? Human Rights and Labour Abuses - Exploitation of Workers in Countries with Few Legal Protections – Corruption. - Physical and Sexual Abuse, Non-Payment of Wages, Denial of Food and Health Care Excessive Working Hours. - Child Labour is one problem focused on by the International Labour Organization. Environmental Degradation - Businesses can look for countries that fail to have adequate legal protection for the environment. - This lowers the cost of business – fewer regulations, procedures, equipment Ex. Electronic Recycling Ex. Metal / Ship Recycling Ex. Clothing – CBC - Made in Bangladesh: https://www.youtube.com/watch?v=onD5UOP5z_c

International Law and Economics International Trade: The Benefits of Trade Access to Markets - International Market (7 billion) is 200 times the Domestic Market (35 million) - A Global Product: Is easiest transferred to new Markets – Standardized - Camera - People in different cultures / markets have different tastes and preferences. - Product Adaptation in a Global Market Ex. Oreo Cookies (Kraft Foods) https://www.youtube.com/watch?v=U48nmKPJclA Cheaper Labour - Labour is the largest expense within the cost of making a good / service - Therefore: Lower wages usually mean Lower Prices - Growing Business Practice – Offshore Outsourcing Ex. Clothing – CBC - Made in Bangladesh: https://www.youtube.com/watch?v=onD5UOP5z_c Increased Quality of Goods - Taking advantage of the “Advantages” – increased Quality in different countries Ex. BMW X5 “Luxury Car” Engine -- Germany Interior Fixtures (ex mirrors -- Magna Corporation in Canada Leather -- South Africa Tires -- France Production / Manufacturing Plant -- Spartanburg, South Carolina

International Law and Economics International Trade: Benefits for Business Increased Quantity - International Market -- Potential for Increased Sales -- Increased Demand - Companies may need to step up Production to meet Demand. Ex: - Increased Hours and Employment - Increased Efficiency and Productivity - New Production Technologies - New Facilities / Location Access to Resources - International Trade and Business give business to all 3 Types of Resources 1. Natural Resources 2. Human Resources 3. Capital Resources Ex. DeBeers in Canada: https://www.canada.debeersgroup.com/Mining/Snap-Lake-Mine/ https://www.canada.debeersgroup.com/Media-Centre/Videos/