Trade theories such as comparative advantage and factor endowment fail to fully explain Ecuador’s competitive position in exporting roses. This is because Ecuador’s success in the rose industry is attributed to its unique climatic conditions, suitable for year-round production, and its focus on large-scale production and efficient logistics, rather than the traditional factors of labor and resources emphasized by trade theories.
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Trade theories such as comparative advantage and factor endowment fail to fully explain Ecuador’s competitive position in exporting roses. This is because Ecuador’s success in the rose industry is attributed to its unique climatic conditions, suitable for year-round production, and its focus on large-scale production and efficient logistics, rather than the traditional factors of labor and resources emphasized by trade theories.
Ecuador is one of the world’s largest exporters of roses, accounting for a significant share of the global market. The country’s competitive advantage in this industry can be attributed to several factors:
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Unique Climatic Conditions: Ecuador’s location near the equator provides it with favorable climatic conditions for rose cultivation. The high altitude, ample sunlight, and mild temperatures create an ideal environment for year-round production, enabling Ecuadorian rose growers to supply the market consistently.
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Large-Scale Production: Ecuador’s rose industry has embraced economies of scale, with many farms specializing in large-scale production. This allows them to benefit from cost efficiencies and economies of scope, enabling them to offer competitive prices in the global market.
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Efficient Logistics: Ecuador has invested in developing efficient logistics and transportation networks to ensure the timely export of roses. Its proximity to major markets, such as the United States and Europe, enables quick delivery, reducing transportation costs and ensuring the freshness of the flowers.
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Variety and Quality: Ecuador cultivates a wide variety of roses, including unique and exotic breeds, which distinguishes its exports from other players in the market. Furthermore, Ecuadorian roses are known for their exceptional quality and long vase life, making them highly sought after by consumers.
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Skilled Labor Force: Although trade theories may not emphasize labor as a primary factor, Ecuador’s rose industry benefits from a skilled labor force with expertise in rose cultivation and post-harvest techniques. Workers are trained in the best practices for growing, harvesting, sorting, and packaging roses, ensuring high-quality exports.
Despite the limitations of traditional trade theories in fully explaining Ecuador’s competitive position in exporting roses, the country’s success in the industry is evident. As famous economist Paul Samuelson once said, “Ecuador’s rose industry defies conventional trade theories. It is a testament to the role of unique conditions and strategic focus in shaping a country’s competitive advantage.”
Table: Comparison of Ecuador and traditional trade theory factors for rose exports
| Factors | Traditional Trade Theories | Ecuador’s Competitive Advantage |
|---|---|---|
| Climate | Not a significant factor | Unique conditions for year-round production |
| Labor | Emphasized | Skilled labor force in rose cultivation |
| Resources | Emphasized | Efficient large-scale production |
| Logistics | Not a significant factor | Investment in efficient transportation networks |
| Variety | Not a significant factor | Wide range of rose varieties |
| Quality | Not a significant factor | Exceptional quality and long vase life |
Video related “What trade theories do not help explain Ecuador’s competitive position in exporting roses Why is this so?”
The video section examines Paul Krugman’s views on globalization and the limitations of economic theory. Krugman acknowledges that economists have downplayed the negative effects of globalization on wages and employment, realizing his own initial views were flawed. The video also explores the shortcomings of the comparative advantage theory in explaining real-world trade. It raises the need to reevaluate economic theories and not blindly rely on them, highlighting the importance of incorporating historical and qualitative analysis alongside modeling. Additionally, the video questions the purpose of modeling ideas that are already well-known and emphasizes the need for diverse discourse and considering various perspectives.
Other options for answering your question
Question 5-4 What trade theories do not help Ecuador’s competitive position in exporting roses? Interventionist theories Mercantilism will not help Ecuador in their competitive position since it is about a form of government intervention and the treasury in gold which is not the case with Ecuador.
Some of the trade theories that do not explain or tells Ecuador’s competitive position are the comparative advantage and the country size theory. Ecuador’s trade embodies have many specialty products with their roses being the one of them. Many other countries also harvest the roses but not to the premium quality of Ecuador roses.
Also, people ask
What is the basis of Ecuador’s comparative advantage in the production of roses? Answer: Ecuador, with its favourable climate, excellent spring water, fertile volcanic soil, and high altitude provides the perfect conditions for high-quality rose production.
Who are the main competitors of this Ecuadorian rose industry? Response will be: These indicated that both Ecuador and Colombia enjoy a strong comparative advantage among their direct competitors: the Netherlands, Kenya, and Ethiopia.
Also, Who in these countries benefits from the importation of Ecuadorian roses and how do they benefit?
Response will be: Answers 2: United States is the most benefit country from the importation of Ecuadorean roses because all the roses imported will be sold at the premium prices in the shop around the country. Besides, the Ecuadorean roses have been quickly become the Rolls-Royce of roses. Europe country will lose from this importation.
Also asked, What does the US trade with Ecuador?
As a response to this: Bilateral Economic Relations
Bilateral goods trade between the countries totaled more than $13.1 billion in 2021. Major U.S. exports to Ecuador include petroleum products, machinery, computers and electronic equipment, chemicals and fertilizers, transportation equipment, and cereals and grains.
Why is Ecuador the world’s third-largest exporter of Roses?
Ecuador is the world’s third-largest exporter of cut flowers, 73 per cent of which are roses. It is an industry that employed 103,000 people and generated $837m of business in 2013. According to guidebooks, Ecuador’s success comes down to its latitude: only on the equator, so the story goes, do roses grow perfectly straight.
Also to know is, How has the economic crisis affected the Ecuadorean rose industry? The recent economic crisis in Russia, prompted by the fall in oil prices and sanctions over Ukraine, has had a significant impact on the Ecuadorean rose industry. In the second half of 2014, exports to Russia fell 30 per cent in value, and 26 per cent by volume.
In this regard, How do economists explain global trade?
Answer: Over time, economists have developed theories to explain the mechanisms of global trade. The main historical theories are called classical and are from the perspective of a country, or country-based. By the mid-twentieth century, the theories began to shift to explain trade from a firm, rather than a country, perspective.
Also, What are the major export destinations of Ecuador?
The answer is: Ecuador’s principal export destinations are the United States, Peru, China, Chile, and Panama. Imports include machines and primary industrial materials, motor vehicles, consumer goods, and food and chemical products. Imports come mainly from the United States, China, Colombia, Panama, and Brazil.
Why is Ecuador the world’s third-largest exporter of Roses? Response to this: Ecuador is the world’s third-largest exporter of cut flowers, 73 per cent of which are roses. It is an industry that employed 103,000 people and generated $837m of business in 2013. According to guidebooks, Ecuador’s success comes down to its latitude: only on the equator, so the story goes, do roses grow perfectly straight.
Beside above, How has the economic crisis affected the Ecuadorean rose industry? The recent economic crisis in Russia, prompted by the fall in oil prices and sanctions over Ukraine, has had a significant impact on the Ecuadorean rose industry. In the second half of 2014, exports to Russia fell 30 per cent in value, and 26 per cent by volume.
Besides, How do economists explain global trade? Over time, economists have developed theories to explain the mechanisms of global trade. The main historical theories are called classical and are from the perspective of a country, or country-based. By the mid-twentieth century, the theories began to shift to explain trade from a firm, rather than a country, perspective.
Keeping this in view, How did new nations promote exports?
One way that many of these new nations promoted exports was to impose restrictions on imports. This strategy is called protectionism and is still used today. Nations expanded their wealth by using their colonies around the world in an effort to control more trade and amass more riches.