There are two countries, Home and Foreign. High-skill labour and low-skill labour are the only factors of production. The Home country is high-skill abundant and the Foreign country is low-skill abundant, i.e. H/L > H/L where H and H denote the high-skill workers in the Home and Foreign countries, respectively, and L and L denote the low-skill workers in the Home and Foreign country, respectively. There are two goods, smartphones and clothes. The production of clothes is intensive in low-skill labour. When smartphones are produced in a single location, their production is intensive in high-skill labour. The production of a smartphone can be split into separate activities. Some of these activities require high skills (R