International business

1. Chapter 4: International Business
What Is International Business?
Barriers to International Business
The Canadian government uses barriers, often referred to a roadblocks,
to help protect domestic businesses and consumers.
Tariffs
Tariffs, also called customs duties, are
Finished imported goods include tariffs, which increase their prices.
Canadian products do not carry such tariffs, and, therefore, may be sold
at lower prices. In an effort to protect their domestic industries, countries
put up tariff barriers by increasing the cost of imported goods.

2. Chapter 4: International Business
What Is International Business?
Non-tariff Barriers
Non-tariff barriers are
Costs of Importing and Exporting
The price of a product or service must take the landed cost into
consideration.
The landed cost is the actual cost of an imported purchased item,
composed of:

3. Chapter 4: International Business
What Is International Business?
Excise Taxes
An excise tax is a tax on the manufacture, sale, or
consumption of a particular product within a country.
Currency Fluctuations
Since currency rates fluctuate on a daily basis, an
international purchase made on one day may cost less or
more than another purchase on the following day.
Shifting currency exchange rates vary as the economic
strength of the two countries change on a daily or weekly
basis.

4. Chapter 4: International Business
Flow of Goods and Services
Imports, such as raw materials, processed material, semi-finished
goods, and manufactured products, flow into Canada. Goods and
materials also leave Canada as exports.
Balance of Trade
To maintain a healthy balance of trade, countries try to import the
same total value of products that they export. An imbalance of the two
results in the following:
• a trade deficit
• a trade surplus

5. Chapter 4: International Business
Flow of Goods and Services
Exports
Direct exporting
Indirect exporting
Larger established companies usually use direct exporting while newer
ones utilize indirect exporting.

6. Chapter 4: International Business
Flow of Goods and Services
Canada’s Major Trading Partners
Canada’s number one trade partner is the United States.
Three major reasons for trading with the United States include
1. ?
2. ?
3. ?

7. Chapter 4: International Business
Canada and International Trade
Agreements
Two Main Advantages to Reducing Trade Barriers
1. Domestic business can sell their products abroad at lower prices
since duties are not added.
2. Consumers have access to new foreign products that may result
in lower costs and quality improvement of domestic products.
Trade agreements between countries allow goods and service to flow
more freely across boarders.
World Trade Organization (WTO)
North American Free Trade Agreement (NAFTA)
The Group of Eight (G8)
European Union (EU)
Research and be ready to share: advantages / disadvantage of, the
characteristics of the trade that are outlined in the trade agreement,
countries involved, purpose of the organization.

8. Chapter 4: International Business
The Future of International Trade
Impact of Cultural Differences
Dealing with People
Punctuality
Greetings

9. Chapter 4: International Business
The Future of International Trade
Nonverbal Communication Signals
Good Manners
Decision Making
Global Dependency
Global dependency