Interdependence and American Garlic

Brent Jessop - Knowledge Driven - July 10, 2007

The other day at the grocery store I went to buy a couple cloves of garlic. It really should have been an uneventful experience. But I noticed that the garlic was made in the USA. Again nothing too unusual, American garlic on Canadian store shelves. But the garlic was packaged in China!

Quick Test. Which is cheaper?

1. Grow garlic in the US, ship it to China for packaging and then back to Canada to be sold.
2. Grow and sell garlic in Canada (note: we have an excellent climate for garlic).

I would be willing to bet that option 2 would be the cheaper option. So, why go to so much trouble if it is more expensive?

Interdependence: Cuban Style

About a year ago I went on a vacation to Cuba. Our cigar factory tour guide explained the procedure to us.

1. State approves farmers to grow tobacco
2. Harvested tobacco is shipped to Havana
3. Grading and sorting is done in Havana
4. Sorted tobacco is then shipped to the many cigar factories spread throughout Cuba
5. Cigars are rolled and packaged at the factories
6. Packaged cigars are shipped back to Havana
7. Havana decides how many will be exported and where within Cuba the remainder will be sold

The result is that the cigars sold to tourists outside the cigar factory were not even made in that factory and have actually done some serious travelling around Cuba. Our tour guide cheerfully told us that this was a clever scheme hatched by ĎFidelí (everyone seemed to be on a first name basis with their dictator) to create jobs. A strange way to create jobs in a country starved for petroleum, donít you think?

What this really does is create an interdependence within the country controlled through Havana. There are no cigar factories anywhere near the tobacco fields. Grading expertise is nowhere near the cigar factories. Etc. etc.

Read full article here.
What was the exact wording on the item? It could be the packaging was from china but it was packaged in the US. Seems a needless expense to send your product to china for packaging. Then ship if back.
Labour is so expensive that it is cheaper to send it over and ship it back. Thank your unions.

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