The document discusses global trade patterns and barriers. It provides statistics on world merchandise trade by region from 1948 to 2008. It also profiles top trading countries like India, China, Japan, and the US. The rest of the document discusses factors that influence a firm's international decisions, including product characteristics, country features, and trade policies. It describes different types of trade barriers governments impose and their economic effects. While protectionism aims to shield domestic industries, it reduces efficiency and competitiveness in the long run. Trade liberalization, on the other hand, refers to removing restrictions and incentives to promote trade between nations.

1. Global Market Place

2. Composition & Patterns of World
Trade

3. WTO Statistics
 World merchandise trade and trade in commercial services by region and selected
economy, 2008
 Shares of regional trade flows in world merchandise exports, 2008
 Leading exporters and importers in world merchandise trade, 2008
 World merchandise imports by region and selected economy, 1948, 1953, 1963, 1973,
1983, 1993, 2003 and 2008
 World merchandise exports by region and selected economy, 1948, 1953, 1963, 1973,
1983, 1993, 2003 and 2008

4. WTO Country Profile
 India
 China
 Japan
 United States

5. Geo Business Model

6. Geo-Business Model
There are 3 main
interacting forces
that affect the
firm’s international
decisions.

7. Conditioning Variables
Product Specific Variable – that confer competitive advantages for
the foreign investor
•R & D
•Product Differentiation
•Product processing
•Management Skills
•Know-how
• Economies of scale

8. Conditioning Variables
Country Specific features – that helps to sustain competitive
advantages of the firms
• Economic Size of the market
• Nature of domestic competition
• Resource scarcity
• Surplus

9. Conditioning Variables
Inter-nation variables – that relate to trade/financing across
borders
• International Finance
• Tariffs
• Strategic Alliances

10. Motivational variables
Measures that motivate towards building Competitive Strategy
• Market Seeking – Horizontal/forward integration
• Resource-seeking - vertical/backward integration
• Production efficiency- lower resource cost
• Technology-seeking-access to foreign technology or skilled labor
• Risk Avoidance- minimizing quantum or probability of losses

11. Control variables
That comprise administrative actions-policies of home and
host governments that directly or indirectly influence
international business through +ive incentives and/or –ive
controls.

12. Influence on Variables
The organisation perceives the conditioning
variables(opportunities for competitive
advantage), respond appropriately(motivation
variable-competitive strategy) but has no
influence over the control variables.

13. It describes any government policy or regulation that restricts
international trade.
A trade bloc is a type of intergovernmental agreement, often
part of a regional intergovernmental organization, where
regional barriers to trade (tariffs and non-tariff barriers) are
reduced or eliminated among the participating states.
Trade Barrier

14. Types of Trade barriers
 Import duties
 Import quotas
 Import licenses
 Tariffs
 Export licenses
 Subsidies
 Voluntary Export Restraints
 Mercantilism

15. Impact of Trade Barriers
Direct Effects
• Decline in Consumption
• Increased Domestic Production
• Decline in Imports
• Tariff Revenue

16. Indirect Effect
• Inflation
• Special interests’ privileges
• Government control and political considerations in
economic matters
• Balance-of-payments positions
• Supply-and-demand patterns
• International relations (~trade wars)
Impact of Trade Barriers

17. Other Impacts:
• Manufacturer’ supply sources
• Choices available to consumers
• Competition
• Impact On Income Distribution
Impact of Trade Barriers

18. Monetary Barriers
• Blocked currency
• Differential exchange rates
• Government approvals

19. Why Protection?
Countries use protectionist measures to shield a
country’s markets from intrusion by foreign
competition and imports. Protectionism contributes to
industrial inefficiency and makes a nation
uncompetitive.
Protectionism is implemented through the imposition
of trade barriers, which include tariff barriers and non-
tariff barriers.

20. Case for Protection
 Military Self-Sufficiency
 Increase Domestic Employment
 Diversification-For-Stability
 Infant-Industry Argument
 Strategic Trade Policy
 Protection-Against-Dumping

21.  Increase of business size
 Retaliation and bargaining
 Need to keep money at home
 Encouragement of capital accumulation
 Maintenance of standard of living and real wages
 Conservation of natural resources
 Industrialization of a low-wage nation
Case for Protection

22. Trade Liberalisation
Trade liberalization refers to the removal of
government incentives and restrictions from trade
between nations.
Trade liberalisation driven by macroeconomic policies
and economic reforms, including Structural
Adjustment programmes.
What are + and – of TL?

23. Thank You