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Portion Control

Thinking about manufacturing offshore? Consider the cost of quotas first.

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This story appears in the December 1998 issue of Entrepreneur. Subscribe »

You can't pick up a newspaper today without reading about one company or another making the decision to manufacture its products offshore. Pricing in the marketplace has become a kind of bidding war, and many businesses are finding that to compete, they must shop for foreign manufacturing alternatives. If you decide you want to manufacture your product offshore, however, you may have to factor in the cost of an import quota.

The idea of placing quotas on the amount of goods that can be imported into the United States is not new. In 1792, Alexander Hamilton sponsored legislation to institute import quotas that served to protect infant American industries and allow them to mature rather than face defeat by imports. Since then, some type of quota has always existed in this country. Today, the vast majority of import quotas are found in the textile and apparel industries, although quotas on other import items, such as tuna, cheese and some types of watches, also exist.

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