Comparative advantage suggests we should be looking to Brazil for our future sourcing needs?

October 11th, 2011

Comparative advantage in developing economies is a significant process to understand when evaluating your future offshore practices?

Comparative advantage is a theory that advances that in a free marketplace, each entity or country such as the EU or NAFTA or trading countries will ultimately specialize in activities where it has comparative advantage. Examples of such might be technology, natural resources,   local workers skill sets, agricultural advantages, transportation benefits etc. In an  article published this past March at Bloomberg Businessweek titled BG (BG Group Plc, (the UK’s third- largest natural-gas producer), to Export From Brazil as Nation Becomes Key Oil Source, it would sure seem as though Brazil has the natural resources piece down.

Many people are not aware that Brazil is the world’s seventh largest economy. When you think about the relatively untapped natural resources in this country, their impact as an economic power will only continue to grow.

Now let’s just hope that we don’t create and unnecessary trade agreements that eliminate the comparative advantages that we both have and could build upon.

We look forward to and appreciate your comments.

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