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As a result of NAFTA, tariff barriers have been substantially reduced between the US and Mexico. You are a buyer for Wal-Mart in the automotive parts division with an annual budget of $300MM. You just found a new supplier in Mexico where you can get the same parts cheaper than you can through your current supplier in Japan. After talking to the supplier in Mexico, you realize that he is also sourcing from the same supplier in Japan. How can it be that the products are cheaper from the supplier in Mexico if they are buying from the same Japanese vendor? You wonder if there are side deals, tariff differences or parallel import issues that you have found to be common in dealing with other Asian suppliers. Discuss this problem. Is there an ethical problem in buying from the Mexican vendor?
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