What explanation can the theory offer to justify


Assignment task:

It is interesting to note is that while the commercial aircraft industry had its origins in multiple countries (UK, France, Germany, USA, Japan, Russia, Spain amongst others), the market is now tightly dominated by two companies - Boeing and Airbus. The new commercial aircraft (excluding military aircraft) value is projected to be around USD 300 billion with just a few countries and companies dominating the industry in a global comity of close to 200 nations. The Boeing plant in Everett, Washington and the Airbus plant in Toulouse are huge by any standard. Substantial parts of the aircraft are made elsewhere across the globe. For the Dreamliner, wings, forward fuselage and landing wheels come from Japan, wingtips from Korea, engines from Goodrich (USA) and Rolls Royce (UK), trailing edge from Australia, passenger doors from France and stabilisers from Italy. All the countries that appear to be supplying 'parts' of the aircraft were themselves manufacturing the aircrafts earlier before they became 'parts suppliers'. There are other assembly locations, but much smaller.

In this context, both the USA and France (Europe) have become the pivots of the aircraft industry even though significant value is being created in other countries collectively. To add to this, is an almost ironclad control that the US based Federal Aviation Authority (FAA) exercises over the airline industry. The result is - virtually everything to do with the aircraft industry gets decided and happens in the USA for the benefit of the rest of the countries. Not surprisingly, even the smallest/largest countries trade with the USA.

Question: The above scenario could be explained using the New Trade theory. What explanation can the theory offer to justify the above pattern? Among other theories, do you think PLC theory is also applicable? If 'Yes' or 'No', what supports your stance?

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