Ecuadorean Rose

Samuel David Sims Jr.

International Business

October 9, 2013

Francisco Paredes Sanchez

“In Ecuador approximately 400 rose farms with 60,000 employees exist

and just 500,000 indirect employees. Ecuador exports annually roses of 400 million USD with an upstream tendency” (Franze and Ciroth, 2011). Ecuador has a comparative advantage in the production of roses and have benefited from the US and Europe markets. While becoming the fourth largest producer of roses, Ecuador’s rose industry is also under attach for poor working conditions.

1. What is the basis of Ecuador's comparative advantage in the production of roses?

"The climate of the Ecuadorian highlands is excellent for roses, so that conventional greenhouses are not necessary” (Franze and Ciroth, 2011). Roses grow slower due to the altitude. Being near the equator allows for ideal growing conditions for roses. Roses in this area enjoy the benefits of fertile soil and 12 hour sunlight. In addition, location allows for Ecuador to push roses all year round.  These factors allows for roses with vibrant color and large heads. The location also allows for rose growers to take advantage of production by handwork. This eliminates the need for expensive machinery and greenhouses. It also allows for low wages, which reduces production costs.  It is obvious that these factors allow Ecuador to have a comparative advantage in the production of roses. (Franze and Ciroth, 2011)

2. Most Ecuadorian roses are sold in the United States or Europe. Who in these countries benefits from the importation of Ecuadorean roses, and how do they benefit. Who loses? Do you think the benefits outweigh the cost?

Retail stores such as flower shops, grocery stores, etc., benefits from the importation of Ecuadorean roses. They receive a premium grade product for a great low price and turn around and sell the rose to the consumer at a premium price. The consumers also benefit from the importation of Ecuadorean roses, especially...