In Thailand, it is required that any milk product sold in the country by a foreign company must use the milk produced by Thai dairy farmers. Which of the following economic risks is faced by the international producers of milk products in this situation?

Question

Quizplus · Accepted Answer

In addition to restricting imports of essential supplies to force local purchase, countries often require a portion of any product sold within the country to have local content, that is, to contain locally made parts. As Thailand has required that all milk products sold in its country must use the milk produced from Thai dairy farms, it has used a local-content law to force local purchase. This causes an economic risk for foreign investors.

In Thailand, It Is Required That Any Milk Product Sold