International Division Of Labor
The international division of labor, or DIT, is an extension of the division of labor applied to international trade. It means that countries are specialized to produce certain financial assets: they do not all work the same goods and, thus, exchange among themselves their production. This specialization of countries or areas based initially on simple comparative advantages of different countries to move towards a further breakdown of the value chain , or international decomposition of the production process (DIPP).
In free trade , international specialization leads to the convergence of the remuneration of production factors, according to the theorem of equalization of factor prices, arising from the Heckscher-Ohlin-Samuelson.
This theory is a dogma for agencies like the World Bank . If criticism of protectionism is very relevant, a purely monetary trade may lead to the same nonsense. Specialization and division of labor are factors of growth. But too much specialization should not restore the colonial contract. The multiplier investment involves a degree of complexity of the industrial fabric, otherwise the multiplication is done overseas. Traditional DIT ITD traditional attributes to developed countries the production of manufactured goods and services , and poor countries, often developing countries , the supply of primary products in general (agricultural products, raw materials ). But as far as development and techniques but also countries, the international division of labor is changing. And some southern countries began to manufacture the current manufactures ( textiles , for example). Sometimes called "new international division of labor" to describe the current specialization of countries: the newly industrializing countries, especially Asian, are now producing manufactured goods, including high-end products. Developed countries produce most technology products and services whose production requires high skills. The poorest countries remain stuck in primary products with low added value. Until the 1970s, international trade relations were structured by what is now called the "old international division of labor." As we just noted, this division has been established at the nineteenth century following the Ricardian analysis (Ricardo), corresponding to an exchange of primary products from developing countries against manufactured goods exported by developed countries. However, the emergence of newly industrialized countries (NICs) of Asia and Latin America, draws from the 70s, a "new international division of labor". The first wave of the NPI was dominated by four countries in Southeast Asia (the Four Dragons ): Hong Kong , the South Korea , Singapore and Taiwan , as well as two countries in Latin America: Brazil and the Mexico. Then in the 1980s, came a second wave consisted mainly of Asian countries like Thailand, Malaysia, Indonesia, Philippines and Vietnam ( Asian TRIGR ) Because of their skilled workforce and cheap, these countries were used by multinational firms as the basis of subcontracting. They were first engaged in particular industries, such as optical instruments, watches, toys and machines. Direct investment by multinationals in these countries have, on one hand, transfer of technology, and the other, creating new wealth which in turn financed new projects. Today, countries like South Korea or Brazil, exporting cars, missiles, computers ... well, a small country like Taiwan (23 million) is the third largest exporter of electronic products, and the Fourteenth trading power. The revolution of the past fifty years has come from the lowering of tariffs and substantially lowering transport costs. What counts now is the ability to decompose the manufacturing of products. The product is more complex and it includes components and subassemblies that can be made independently of each other. A car, for example, contains over 5000 parts References The New International Division of Labour
The decomposition process of international production (DIPP)
See also
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