Question

In Thailand, it is required that any milk product sold in the country by a foreign company must use the milk that is at least 50 percent produced by Thai dairy farmers. What economic risk is faced by the international producers of milk products in this situation?

Answer 1

Answer: Local- content laws

Step-by-step explanation: In simple words, these refers to the rules and regulation made by the government requiring foreign firms to use domestic resources if they want to operate in that economy.

In the given case, Thailand requires foreign companies selling milk products to use domestically produced milk for their production.

Hence from the above we can conclude that the economic risk involved is regarding to local content laws.