Explain how each of the factors caused the Kerr Group (this Chinese company) to mom to the US? A. Labor? Even, in U. S. The labor cost will raise, but the difference will shrink as Chinese salaries keep rising. And it will be compensated for by other savings. B. Regulations? Manufactures In Central America can send finished clothes duty-free to the U. S. Unlike companies In China. C. Proximity to? To Charlotte banks and the port in Charleston, S. C. To Central America, where it can send yarn to manufactures there and take advantage of clothes makers there. . Other infrastructure? Industrial land prices have soared, making expansion difficult in China, since the textile industry is plagued by overcapacity; the local governments are reluctant to sell land to producers. 4. How does NONFAT (The North America Free Trade Agreement between Canada, Mexico and the US) matter in this case? U. S. Duties on imported yarn and clothing have existed for decades. But trade pacts such as the North American Free Trade Agreement created duty-free zones between the U. S. And several trade partners. In those agreements, the U.S. Imposed a â€œyarn forwardâ€ requirement, meaning that sixties Imported from partner countries have to be made completely from material produced In those countries or the U. S. If not, they face duties, usually ranging from 5% to for yarns, 10% and 12% for fabrics and 15% to 20% for clothing, according to the National Council of Textile Organizations, a U. S. Textile trade group. For years Asian clothing producers Just swallowed the duties because production and transport costs were so low. Now they are reassessing that practice.Brian Hamiltonians study on Global production costs for textiles in 2003 vs.. 013 for the US and China? Hamilton, who wrote his Ph. D. Dissertation on the global textile industry, said â€œThe rising costs have made it more expensive to spin yarn in China than in the U. S. â€ He found that in 2003, a kilogram of yarn spun in the U. S. Cost $2. 86 to produce, while it cost $2. 76 to produce a kilogram in China. By 2010, however, it cost $3. 45 to produce a kilogram in the U. S. And the cost in China had Jumped to $4. 13 per kilogram. U. S. Production costs were lower than Turkey, Korea and Brazil.
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