Re-Thinking International Trade Paradigms

One of my Bangladeshi American friend, a computer engineer by training, and, and an entrepreneur by heritage (dad used to own a printing business in Bangladesh) , recently has inititiated a process of exporting round log from Canada to Bangladesh. After listening to this, I didn't waste a second to shoot my naive question ' but, won't it be cheaper for a business in Bangladesh to import logs or timbers from neighboring Myanmar (formerly known as Burma), instead of imorting them from the West?'
He replied, 'not necessarily'. Then he explained, there are three main components that makes an internatonal trade happen. One, the good to be imported must have to meet the necessity of import. If I need to import a printer for my windows-run computer, then I can't import a mac-compatible printer, no matter how cheaper it is. Two, the cost of the product (or service) has to be competitive holding the quality constant. The good has to be identical, and, of required quality, only then price comparison will be meaningful. Three, if the product is found to be of identical quality and price in multiple counries, then the cost of shipping will be considered. By the same token, if the product quality and shipping cost are identical, then the importer will focus on importing the stuff from the exporting country offering lower prices. So, it turned out in my friend's case that, the kind of log / timber is required in Bangladesh for a certain purpose, is cheaper to import from Canada than from any other log exporing countries known so far. No doubt, Akiab port of Myanmar is much closer to Chittagong port of Bangladesh. But, after considering all the three points, the Bangladeshi importer found it more profitable to import log from Canada (via port Vancouver).
So, it is time to rethink our good, old international trade paradigms.


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