Offshore Production

Offshore Production and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Offshore Production: Manufacturing activities and assembly operations of foreign subsidiaries or affiliates. Beginning in 1963, US customs regulations –under Items 806.3 and 807 of the US Tariff Schedules, applying to imported articles assembled in whole or in part from US-fabricated components –provided a significant incentive to firms in the electronics and other industries to adopt an offshore assembly strategy, by applying duties only to the extent of the value added abroad. (Offshore production usually implies re-exports to the home country or to third-country markets, while the term screwdriver assembly refers to operations within the country where the completed products are to be sold.) See also export platforms and globalization.