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In the European Union, products can flow freely among its 28 member countries; the North America Free Trade Agreement (NAFTA) is more restrictive. With the Euro being the EU’s primary currency, foreign exchange fluctuations between member countries that could have negative implications on international wire transfers are better defined in risk than when working with a supplier outside the EU. Product components can be sourced elsewhere in Europe and the final product assembled in a single country, all at the same cost to the purchaser. This is one reason why the UK was named the cheapest country in Western Europe to manufacture goods in 2014. The bottom line is that a goods supplier in Romania, where labor costs are cheapest in the EU, has the same competitive advantage as Sweden where manufacturing costs are more than eight times higher. Conversely, this wouldn’t be the case if components were sourced from China (Yuan), Germany (Euro), and Mexico (Peso), and assembled in Canada (Canadian Dollar) for export to the United States.



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