Production Sharing Law and Legal Definition

In international law, production sharing refers to the combined efforts of capital and labor between two countries. Generally, production sharing will be between one country that is developed and one less developed country. For example, in the twin plant program between the United States and Mexico, a United States company may ship cotton cloth to Mexico duty free where it is sewn into shirts by Mexican workers. The finished product is then returned for sale in the United States duty free or at a low duty.