International business provides benefits to businesses such as access to larger markets, cheaper labor costs, increased quality and quantity of goods, and access to more resources. While international trade allows for specialization between countries and increased choice for consumers, there are also costs like offshore outsourcing potentially reducing domestic jobs, and risks of human rights and environmental issues if not properly managed. Government barriers like tariffs are sometimes used to protect domestic industries but trade agreements aim to reduce such barriers to allow freer flow of goods and services between countries.
The document discusses international trade, including its benefits like job creation and poverty reduction. It defines key terms like exports, imports, trade deficit, and trade surplus. Several countries are identified as major trading partners and export commodities of the Philippines are outlined. Differences between domestic and international trade are explored, specifically regarding mobility of goods and factors of production. The concepts of comparative advantage and specialization are explained. Risks of international trade like payment defaults and exchange rate fluctuations are also noted. Mechanisms to regulate trade such as tariffs, quotas, and trade organizations like the WTO and ASEAN are defined.
The document provides an overview of international business, including:
- Benefits of international business like access to larger markets, cheaper labor, and increased quality/quantity of goods
- The five Ps of international business: product, price, proximity, preference, and promotion
- Potential costs like outsourcing, human rights issues, and environmental degradation
- Barriers to international trade such as tariffs and non-tariff barriers
- Canada's major trading partners and trade agreements
- The future of international trade bodies and increasing globalization and cultural integration.
International trade involves the exchange of goods and services between countries. It has increased globally to include services like transportation, banking, and communication. International trade occurs when countries specialize in producing goods they have a comparative advantage in and trade for goods they have a comparative disadvantage in. Reasons for international trade include uneven distribution of natural resources between countries, differences in economic growth rates, and allowing for division of labor and specialization. The main benefits of international trade are optimal use of resources, availability of all types of goods, and economic growth and development.
This document provides an overview of theories of international trade and barriers to trade. It discusses traditional trade theories like mercantilism, absolute advantage, and comparative advantage. It also covers modern theories including factor proportions theory, product cycle theory, and strategic trade theory. The document then examines different types of tariff and non-tariff barriers to trade such as tariffs, quotas, technical barriers, and restrictions. Finally, it defines trade blocs and discusses how they can reduce barriers between member countries.
The document proposes a barter program where companies can get advertising and PR services without spending cash. Through the program, companies provide their own products/services that the barter company trades with media outlets to obtain advertising opportunities. This allows companies to gain brand exposure in new markets without capital expenditures. The barter company has a global network of media outlets and can customize multi-market PR campaigns for companies.
This document discusses various concepts related to international trade including:
- The need for trade as countries import and export goods they cannot produce domestically.
- Different historical economic systems like the barangay economy and manorial system.
- The development of a global economy and trade's role in development over time.
- Mercantilism as a policy focused on exports and limiting imports to accumulate wealth and power.
- Definitions of trade, international trade, absolute advantage, and comparative advantage theories.
- Philippine trade practices like relying on exports for foreign currency to import needed goods and services.
- Other sources of foreign currency besides exports and how imports exceed exports.
- The importance of a favorable balance of
International trade has a long history dating back to ancient civilizations. Nearly every person on Earth has benefited from international trade through improved quality of life. International trade involves the buying and selling of goods and services between countries. It allows countries to obtain products that are better quality, less expensive, or different than what is produced domestically. While international trade provides advantages like increased sales and market access, it also involves risks and disadvantages such as additional costs and delays in payments. Specialization and trade allow countries to focus on producing goods they have a comparative advantage in.
This document provides an overview of key concepts in international business including:
1. The meaning and differences between domestic and international/foreign business.
2. Why companies go international and various market entry strategies such as exporting, wholly owned subsidiaries, licensing, franchising, joint ventures, and strategic alliances.
3. International trade theories including mercantilism, absolute cost advantage, comparative advantage, Heckscher-Ohlin theory, and Porter's national competitive advantage diamond.
4. Instruments of trade policy like tariffs, subsidies, import quotas, and anti-dumping policies.
The document discusses international trade, including its benefits like job creation and poverty reduction. It defines key terms like exports, imports, trade deficit, and trade surplus. Several countries are identified as major trading partners and export commodities of the Philippines are outlined. Differences between domestic and international trade are explored, specifically regarding mobility of goods and factors of production. The concepts of comparative advantage and specialization are explained. Risks of international trade like payment defaults and exchange rate fluctuations are also noted. Mechanisms to regulate trade such as tariffs, quotas, and trade organizations like the WTO and ASEAN are defined.
The document provides an overview of international business, including:
- Benefits of international business like access to larger markets, cheaper labor, and increased quality/quantity of goods
- The five Ps of international business: product, price, proximity, preference, and promotion
- Potential costs like outsourcing, human rights issues, and environmental degradation
- Barriers to international trade such as tariffs and non-tariff barriers
- Canada's major trading partners and trade agreements
- The future of international trade bodies and increasing globalization and cultural integration.
International trade involves the exchange of goods and services between countries. It has increased globally to include services like transportation, banking, and communication. International trade occurs when countries specialize in producing goods they have a comparative advantage in and trade for goods they have a comparative disadvantage in. Reasons for international trade include uneven distribution of natural resources between countries, differences in economic growth rates, and allowing for division of labor and specialization. The main benefits of international trade are optimal use of resources, availability of all types of goods, and economic growth and development.
This document provides an overview of theories of international trade and barriers to trade. It discusses traditional trade theories like mercantilism, absolute advantage, and comparative advantage. It also covers modern theories including factor proportions theory, product cycle theory, and strategic trade theory. The document then examines different types of tariff and non-tariff barriers to trade such as tariffs, quotas, technical barriers, and restrictions. Finally, it defines trade blocs and discusses how they can reduce barriers between member countries.
The document proposes a barter program where companies can get advertising and PR services without spending cash. Through the program, companies provide their own products/services that the barter company trades with media outlets to obtain advertising opportunities. This allows companies to gain brand exposure in new markets without capital expenditures. The barter company has a global network of media outlets and can customize multi-market PR campaigns for companies.
This document discusses various concepts related to international trade including:
- The need for trade as countries import and export goods they cannot produce domestically.
- Different historical economic systems like the barangay economy and manorial system.
- The development of a global economy and trade's role in development over time.
- Mercantilism as a policy focused on exports and limiting imports to accumulate wealth and power.
- Definitions of trade, international trade, absolute advantage, and comparative advantage theories.
- Philippine trade practices like relying on exports for foreign currency to import needed goods and services.
- Other sources of foreign currency besides exports and how imports exceed exports.
- The importance of a favorable balance of
International trade has a long history dating back to ancient civilizations. Nearly every person on Earth has benefited from international trade through improved quality of life. International trade involves the buying and selling of goods and services between countries. It allows countries to obtain products that are better quality, less expensive, or different than what is produced domestically. While international trade provides advantages like increased sales and market access, it also involves risks and disadvantages such as additional costs and delays in payments. Specialization and trade allow countries to focus on producing goods they have a comparative advantage in.
This document provides an overview of key concepts in international business including:
1. The meaning and differences between domestic and international/foreign business.
2. Why companies go international and various market entry strategies such as exporting, wholly owned subsidiaries, licensing, franchising, joint ventures, and strategic alliances.
3. International trade theories including mercantilism, absolute cost advantage, comparative advantage, Heckscher-Ohlin theory, and Porter's national competitive advantage diamond.
4. Instruments of trade policy like tariffs, subsidies, import quotas, and anti-dumping policies.
This document provides notes on international trade concepts. It begins with reasons why nations trade, such as lower prices, greater choice, and differences in resources. It then discusses absolute and comparative advantage using an example of an industrialized country trading with a developing country. Key terms like imports, exports, tariffs, and protectionism are defined. Arguments for and against protectionism are outlined. The document concludes with an overview of the history and functions of the World Trade Organization.
International trade between countries is regulated through a system of bilateral and multilateral agreements and treaties. The key objectives of modern multilateral trade regulation include expanding export and import opportunities while resolving trade disputes. The General Agreement on Tariffs and Trade (GATT) and its successor the World Trade Organization (WTO) established fundamental principles like non-discrimination between countries and transparency in trade rules. The Most Favored Nation (MFN) rule and National Treatment (NT) rule prohibit discrimination against imports through tariffs or internal taxes compared to domestic goods or those from other countries.
“The aim of international trade is to increase production and to raise the standard of living of the people. International trade helps citizens of one nation to consume and enjoy the possession of goods produced in some other nation.”
International trade occurs between countries due to differences in factors of production and limited mobility between countries. There are three main reasons for international trade: diversity of production conditions between countries, increasing returns to scale, and differences in tastes for goods. International trade has advantages like increased world output, variety of goods and services, and economic growth. However, it also has disadvantages such as economic and political interdependence and depletion of national reserves. Countries employ protectionist policies and trade barriers like tariffs, quotas, and embargoes to protect domestic industries and employment.
Here are some key differences that could impact international business:
- Different languages require translation of documents, websites, etc. and interpreters for meetings. This adds complexity and cost.
- Variations in business etiquette like formality of address, importance of gifts/meals, negotiation style could lead to misunderstandings or offense if not aware of cultural norms.
- Holidays, work schedules, and expectations around work-life balance may not align between cultures, complicating coordination of projects, meetings, and timelines.
- Hierarchy and decision making processes could be very different - decisions may involve many more people or layers of approval than expected.
- Attitudes toward authority, risk, innovation,
International Business basic concept of international business
,
approaches to international business/ modes of ent
,
barriers to international business
,
absolute advantage and comparative advantage
Advantages and disadvantages of INTERNATIONAL BUSINESSDr. Ravneet Kaur
The document outlines several advantages and disadvantages of international business. It notes that international business allows countries to earn foreign currency through exports, specialize production, make optimal use of resources, and increase standards of living. It also benefits consumers through greater product choice and availability. However, it can also negatively impact economies through increased competition, potential exploitation of developing countries, and cultural influence.
There are three principal differences between how economists and noneconomists view international trade: 1) Economists see all forms of trade as equally advantageous, while noneconomists favor trading within one's own group. 2) Economists believe imports and exports are both good for the economy, while noneconomists favor exports. 3) Economists believe a country's trade balance depends on many factors like savings and investment, while noneconomists focus on competitiveness. Economists view trade as increasing efficiency through specialization and comparative advantage, while noneconomists emphasize tribal rivalries.
1. International trade involves cross-border transactions of goods, services, and resources between nations for commercial purposes.
2. There are several reasons why companies enter international markets, including accessing new markets and resources, reducing costs, and gaining competitive advantages.
3. While international trade provides benefits like increased specialization and access to cheaper goods, it also faces challenges such as political risks, trade barriers, and cultural differences between countries.
Ibm unit 2 international trade and investmentGanesha Pandian
This document provides an overview of international trade and investment topics. It discusses the role of organizations like the WTO and GATT in promoting global trade. It covers various trade theories like comparative advantage and the Heckscher-Ohlin model. The document also examines foreign direct investment, factors influencing FDI, and India's FDI policy. Additionally, it defines regional trade blocks and provides examples of major trade blocks like the EU, NAFTA, and ASEAN.
The document provides an introduction to international trade, including reasons for trade, production possibilities, absolute and comparative advantage, benefits of specialization, and the relationship between specialization and trade. It defines key concepts such as absolute advantage, comparative advantage, and opportunity costs. It explains how comparative advantage allows countries to benefit from trade even if one country has an absolute advantage in all goods. Specialization according to comparative advantage results in more efficient allocation of resources and a larger quantity of outputs for trading nations.
1. The document discusses various topics related to international business including what international business is, types of international businesses, reasons for growth in international business, and challenges.
2. International business involves commercial activities that cross national borders such as international trade, manufacturing, and services. Common types include global, multi-domestic, and international companies.
3. Recent growth is due to factors like expanding technology, lower trade barriers, and reduced transportation and communication costs that enable companies to better capitalize on international opportunities. Challenges include political risks, high costs, and exchange rate instability.
- International business involves commercial transactions between two or more countries, including trade in goods and services, investments, and transportation. It can involve private companies or governments.
- There are several approaches that companies take when entering international business - from an ethnocentric view focusing only on the home country market, to a geocentric view developing a standardized approach across all foreign markets.
- International business offers both advantages like access to new markets and resources, as well as disadvantages such as additional costs and risks of operating in foreign environments. Liberalization of trade and improvements in transportation and communication have contributed to recent growth in international business.
International trade involves the exchange of goods and services between countries. It represents a significant share of GDP for most countries. The main terms related to international trade are exports, which are goods and services sold to other countries, and imports, which are goods and services purchased from other countries. International trade brings several benefits, including enabling fuller utilization of resources, providing consumers with a larger variety of goods at cheaper costs, and fostering cooperation between trading partners.
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)Neeraj Bhandari
This document provides an overview of an international trade and policy course. The 6-unit course covers topics like international trade theories, economic growth and trade, trade policies, and economic integration. It lists two textbooks for the course. It then discusses what international trade is, its importance for firms and nations, and how it has grown. It covers reasons firms engage in trade like expanding markets and lowering costs. It also discusses modes of international business operations and how economic events in one country can impact others due to increased interdependence. Finally, it lists some international economic problems faced by different countries.
International trade involves the exchange of goods and services between countries. Almost every product can be found in international markets, including food, clothes, oil, jewelry, and currencies. About 15% of the world's output is traded internationally in a typical year. The WTO helps facilitate international trade by implementing trade agreements, resolving disputes, and reviewing countries' trade policies. While international trade provides benefits like increased efficiency and choice, it also faces challenges such as job losses and high startup costs of entering new markets.
Lecture 1 introduction to international tradettbhavanecon
International trade involves the exchange of goods and services between countries. It allows countries to gain access to products not available domestically and to specialize in producing goods where they have a comparative advantage. The main reasons for trade between countries include differences in technologies, resource endowments, consumer demands, economies of scale in production, and government policies. While international trade provides benefits like increased efficiency and economic growth, it can also lead to disadvantages such as resource depletion and impacts on domestic industries. A country's trade is recorded through its balance of payments, including exports, imports, and whether it has a trade surplus or deficit.
The document discusses various topics related to international trade such as the growth of international trade over time, protectionism versus free trade, and specific trade issues like the banana wars between the US and EU. It provides definitions of international trade and protectionism. Protectionism aims to restrict imports and protect local industries while free trade allows trade without government barriers. The document also notes both the benefits and criticisms of free trade, such as increased specialization but also potential job losses.
This document discusses strategies for teaching financial literacy. It defines financial literacy as having the knowledge, skills, and confidence to make responsible financial decisions. The document suggests teaching basic concepts like budgeting, investing, and the time value of money. It acknowledges that teaching financial literacy does not require formal lessons, but can be incorporated into various subjects through stories, activities, games and videos. The document provides some online resources and game ideas for teaching financial literacy concepts in an engaging way.
This document provides notes on international trade concepts. It begins with reasons why nations trade, such as lower prices, greater choice, and differences in resources. It then discusses absolute and comparative advantage using an example of an industrialized country trading with a developing country. Key terms like imports, exports, tariffs, and protectionism are defined. Arguments for and against protectionism are outlined. The document concludes with an overview of the history and functions of the World Trade Organization.
International trade between countries is regulated through a system of bilateral and multilateral agreements and treaties. The key objectives of modern multilateral trade regulation include expanding export and import opportunities while resolving trade disputes. The General Agreement on Tariffs and Trade (GATT) and its successor the World Trade Organization (WTO) established fundamental principles like non-discrimination between countries and transparency in trade rules. The Most Favored Nation (MFN) rule and National Treatment (NT) rule prohibit discrimination against imports through tariffs or internal taxes compared to domestic goods or those from other countries.
“The aim of international trade is to increase production and to raise the standard of living of the people. International trade helps citizens of one nation to consume and enjoy the possession of goods produced in some other nation.”
International trade occurs between countries due to differences in factors of production and limited mobility between countries. There are three main reasons for international trade: diversity of production conditions between countries, increasing returns to scale, and differences in tastes for goods. International trade has advantages like increased world output, variety of goods and services, and economic growth. However, it also has disadvantages such as economic and political interdependence and depletion of national reserves. Countries employ protectionist policies and trade barriers like tariffs, quotas, and embargoes to protect domestic industries and employment.
Here are some key differences that could impact international business:
- Different languages require translation of documents, websites, etc. and interpreters for meetings. This adds complexity and cost.
- Variations in business etiquette like formality of address, importance of gifts/meals, negotiation style could lead to misunderstandings or offense if not aware of cultural norms.
- Holidays, work schedules, and expectations around work-life balance may not align between cultures, complicating coordination of projects, meetings, and timelines.
- Hierarchy and decision making processes could be very different - decisions may involve many more people or layers of approval than expected.
- Attitudes toward authority, risk, innovation,
International Business basic concept of international business
,
approaches to international business/ modes of ent
,
barriers to international business
,
absolute advantage and comparative advantage
Advantages and disadvantages of INTERNATIONAL BUSINESSDr. Ravneet Kaur
The document outlines several advantages and disadvantages of international business. It notes that international business allows countries to earn foreign currency through exports, specialize production, make optimal use of resources, and increase standards of living. It also benefits consumers through greater product choice and availability. However, it can also negatively impact economies through increased competition, potential exploitation of developing countries, and cultural influence.
There are three principal differences between how economists and noneconomists view international trade: 1) Economists see all forms of trade as equally advantageous, while noneconomists favor trading within one's own group. 2) Economists believe imports and exports are both good for the economy, while noneconomists favor exports. 3) Economists believe a country's trade balance depends on many factors like savings and investment, while noneconomists focus on competitiveness. Economists view trade as increasing efficiency through specialization and comparative advantage, while noneconomists emphasize tribal rivalries.
1. International trade involves cross-border transactions of goods, services, and resources between nations for commercial purposes.
2. There are several reasons why companies enter international markets, including accessing new markets and resources, reducing costs, and gaining competitive advantages.
3. While international trade provides benefits like increased specialization and access to cheaper goods, it also faces challenges such as political risks, trade barriers, and cultural differences between countries.
Ibm unit 2 international trade and investmentGanesha Pandian
This document provides an overview of international trade and investment topics. It discusses the role of organizations like the WTO and GATT in promoting global trade. It covers various trade theories like comparative advantage and the Heckscher-Ohlin model. The document also examines foreign direct investment, factors influencing FDI, and India's FDI policy. Additionally, it defines regional trade blocks and provides examples of major trade blocks like the EU, NAFTA, and ASEAN.
The document provides an introduction to international trade, including reasons for trade, production possibilities, absolute and comparative advantage, benefits of specialization, and the relationship between specialization and trade. It defines key concepts such as absolute advantage, comparative advantage, and opportunity costs. It explains how comparative advantage allows countries to benefit from trade even if one country has an absolute advantage in all goods. Specialization according to comparative advantage results in more efficient allocation of resources and a larger quantity of outputs for trading nations.
1. The document discusses various topics related to international business including what international business is, types of international businesses, reasons for growth in international business, and challenges.
2. International business involves commercial activities that cross national borders such as international trade, manufacturing, and services. Common types include global, multi-domestic, and international companies.
3. Recent growth is due to factors like expanding technology, lower trade barriers, and reduced transportation and communication costs that enable companies to better capitalize on international opportunities. Challenges include political risks, high costs, and exchange rate instability.
- International business involves commercial transactions between two or more countries, including trade in goods and services, investments, and transportation. It can involve private companies or governments.
- There are several approaches that companies take when entering international business - from an ethnocentric view focusing only on the home country market, to a geocentric view developing a standardized approach across all foreign markets.
- International business offers both advantages like access to new markets and resources, as well as disadvantages such as additional costs and risks of operating in foreign environments. Liberalization of trade and improvements in transportation and communication have contributed to recent growth in international business.
International trade involves the exchange of goods and services between countries. It represents a significant share of GDP for most countries. The main terms related to international trade are exports, which are goods and services sold to other countries, and imports, which are goods and services purchased from other countries. International trade brings several benefits, including enabling fuller utilization of resources, providing consumers with a larger variety of goods at cheaper costs, and fostering cooperation between trading partners.
International Trade and Policy- Introduction by Neeraj Bhandari (Surkhet Nepal)Neeraj Bhandari
This document provides an overview of an international trade and policy course. The 6-unit course covers topics like international trade theories, economic growth and trade, trade policies, and economic integration. It lists two textbooks for the course. It then discusses what international trade is, its importance for firms and nations, and how it has grown. It covers reasons firms engage in trade like expanding markets and lowering costs. It also discusses modes of international business operations and how economic events in one country can impact others due to increased interdependence. Finally, it lists some international economic problems faced by different countries.
International trade involves the exchange of goods and services between countries. Almost every product can be found in international markets, including food, clothes, oil, jewelry, and currencies. About 15% of the world's output is traded internationally in a typical year. The WTO helps facilitate international trade by implementing trade agreements, resolving disputes, and reviewing countries' trade policies. While international trade provides benefits like increased efficiency and choice, it also faces challenges such as job losses and high startup costs of entering new markets.
Lecture 1 introduction to international tradettbhavanecon
International trade involves the exchange of goods and services between countries. It allows countries to gain access to products not available domestically and to specialize in producing goods where they have a comparative advantage. The main reasons for trade between countries include differences in technologies, resource endowments, consumer demands, economies of scale in production, and government policies. While international trade provides benefits like increased efficiency and economic growth, it can also lead to disadvantages such as resource depletion and impacts on domestic industries. A country's trade is recorded through its balance of payments, including exports, imports, and whether it has a trade surplus or deficit.
The document discusses various topics related to international trade such as the growth of international trade over time, protectionism versus free trade, and specific trade issues like the banana wars between the US and EU. It provides definitions of international trade and protectionism. Protectionism aims to restrict imports and protect local industries while free trade allows trade without government barriers. The document also notes both the benefits and criticisms of free trade, such as increased specialization but also potential job losses.
This document discusses strategies for teaching financial literacy. It defines financial literacy as having the knowledge, skills, and confidence to make responsible financial decisions. The document suggests teaching basic concepts like budgeting, investing, and the time value of money. It acknowledges that teaching financial literacy does not require formal lessons, but can be incorporated into various subjects through stories, activities, games and videos. The document provides some online resources and game ideas for teaching financial literacy concepts in an engaging way.
This document discusses different strategies for fundraising and building relationships within a community. It emphasizes that fundraising is about building trust and relationships rather than just asking for money. Some key points made include:
- People are more likely to donate to organizations they trust and that their peers support. Building relationships and trust within a community is important for fundraising.
- Organizations should understand the needs of their community and how their mission addresses those needs when fundraising. They should clearly communicate how donations will make an impact.
- Follow up is important when fundraising from corporations and foundations. Organizations must determine fundraising goals and create sponsorship packages to provide value to donors.
- Building partnerships within the community and understanding what motivates individual donors are important strategies
This document contains a list of hyperlinks to various websites including google.com.gt, slideshare.net, and Yahoo.com. It also mentions exercises for hyperlinks on Wikipedia and hyperlinks to Wikipedia.
Over the course of 11 months, a crew worked tirelessly to rebuild the Southern Wind, turning an empty ship into a fully functional vessel with six cabins, updated systems, and supplies for relief efforts. They faced challenges like record floods but supported each other and learned new skills along the way. Through teamwork and help from supporters, they transformed the ship from empty to seaworthy and prepared to deliver aid to Haiti.
The document discusses the key characteristics and skills needed to be a successful entrepreneur. It identifies traits like being a risk taker, persistent, imaginative, and hardworking. Entrepreneurs also need strong research, management, and relationship building skills. Examples are given of successful Canadian entrepreneurs like Jimmy Pattison, Vickie Kerr, and David Tuccaro. A venture must also be feasible, have marketability, and be potentially profitable to succeed.
Marketing involves all activities related to moving goods and services from producers to consumers. It has two key roles - selling what a business produces and managing its brand. Marketing activities include branding, distribution, advertising, promotion, research, development, and sales. Successful marketing increases brand equity or value through establishing a brand name, logo, slogan and consistent brand identification that connects with consumers over the product life cycle.
The Macedonian Mozilla Community has been active since the early releases of Firefox, localizing the browser and other Mozilla products into Macedonian and organizing public launch events. The community was the first to host the Mozilla Balkans event in 2010. Key members include Novica Nakov, a senior contributor responsible for translations, and Gorjan Jovanovski, who helps with marketing and event organization. Going forward, the community aims to better understand the unique aspects of the Balkan region, recruit new contributors, further localize products, and enable collaboration across Balkan communities.
This document discusses the importance of teaching financial literacy in schools. It provides several reasons why financial literacy education is needed: many students graduate with significant debt loads and have unrealistic expectations about future earnings; Canadians feel knowledgeable about personal finances but debt levels are high and often used to cover daily living expenses; and financial topics are rarely discussed between parents and children. The document promotes two resources for teaching financial literacy: The City, a comprehensive resource developed for high schools that uses fictional character stories and lesson plans; and Financial Basics, a shorter resource with workbooks, videos, and interactive tools suitable for introducing financial concepts. Both resources provide modular, flexible approaches that can be customized for different classrooms and audiences.
The document discusses strategies for teaching financial literacy. It defines financial literacy and explains why it is important to improve both individuals and the economy. Some key strategies suggested include incorporating basic economic and budgeting concepts across various lessons, using stories, games and activities to engage students, and finding online resources to supplement teaching. The goal is to start students thinking about financial matters in brief moments throughout school to build their skills and confidence in personal financial management.
The document provides information about popular social media platforms and building an effective social media strategy. It discusses key facts about Facebook, Twitter, and YouTube users and activity. It then outlines four steps to develop a social media strategy: 1) self-reflection on brand values and audience, 2) defining the target community, 3) establishing a social media presence, and 4) creating engaging content. The document concludes with recommendations to focus on sharing valuable content with audiences and embracing feedback.
This document discusses entrepreneurial opportunities that arise from invention and innovation. It explains that entrepreneurs can develop new ventures by coming up with new ideas or finding solutions to consumer needs and wants. Successful ventures combine developing new ideas with understanding market demands. The document also provides examples of famous Canadian inventions and inventors, and explains the importance of patents, copyrights, licensing, and manufacturing in bringing new inventions to market.
This document discusses different types of business entities under company law, including private limited companies. A private limited company has between 2 to 50 members, is prohibited from inviting public investment, and must include "Private Limited" or equivalent in its name. It offers advantages like easy capitalization and limited shareholder liability but also restrictions like mandatory audits and an inability to trade shares on public markets. The document compares private limited companies to sole proprietorships, partnerships and other types of companies.
This document provides an overview of international business. It defines international business as transactions involving the selling of items produced in other countries. The benefits for businesses engaging in international trade include access to larger markets, cheaper labor costs, and access to more resources. The document also discusses some of the costs of international trade like outsourcing and potential human rights and environmental issues. It outlines various barriers to international trade such as tariffs and currency fluctuations. Finally, it looks at Canada's major trading partners and various trade agreements that can help reduce barriers between countries.
Ch04-What Is International Business.pptHelmiAkbary
International businesses face various barriers imposed by governments to protect domestic industries, such as tariffs which increase import prices. Non-tariff barriers and costs like taxes, transportation fees, and currency exchange rates can also affect import and export prices. Countries establish trade agreements to reduce these barriers and allow freer flow of goods and services between nations. The future of international trade will continue to be shaped by cultural differences that businesses must navigate.
International trade involves the exchange of goods and services between countries. It has increased substantially over time to include trade in services like transportation, banking, and tourism in addition to physical goods. Countries engage in international trade because natural resources are unevenly distributed globally and different countries have comparative advantages in producing certain goods, leading them to specialize in those products and trade for other goods.
International trade ppt on international and regionalleamangaring12
This document discusses international trade. It defines international trade as the exchange of goods and services between citizens of different countries. The goals of international trade are to increase production and raise living standards. There are three types of international trade: import, export, and entrepot trade. The document also discusses the types of international trade transactions, objectives, benefits, barriers, problems, advantages, disadvantages, and theories of international trade such as absolute advantage.
This document discusses the basis and principles of international trade and absolute advantages. It defines international trade as the exchange of goods and services between citizens of different countries. International trade aims to increase production and raise living standards. It benefits countries by allowing specialization based on absolute advantages in certain goods. When one country has a lower absolute cost of producing a good, both countries can gain from trade.
This document discusses the basis and principles of international trade and absolute advantages. It defines international trade as the exchange of goods and services between citizens of different countries. International trade aims to increase production and raise living standards. It benefits countries by allowing specialization based on absolute advantages in certain goods. When one country has a lower absolute cost of producing a good, both countries can gain from trade.
This document provides an overview of key concepts in international business and marketing. It discusses reasons why nations trade, including seeking new markets and growth opportunities. Absolute and comparative advantage in international trade are explained. Methods for measuring international trade like balance of trade and exchange rates are also described. Finally, the document outlines major barriers to global business like cultural differences, infrastructure issues, and various types of trade restrictions.
International trade is the exchange of goods and services between countries. It allows countries to specialize in what they can produce at a lower cost based on their resources and advantages. According to the theory of absolute advantage, if one country can produce a good at a lower absolute cost than another country, then both countries benefit from trade. The document discusses the types, characteristics, benefits, barriers, and theories of international trade.
The document discusses various topics related to international trade and business operations. It begins by asking students to read a handout about McDonald's community commitments. It then covers challenges and opportunities faced by international companies, examples of government policies that encourage international trade, and formal and informal barriers to trade. Examples of how companies like Walmart, Coca-Cola, and Nike address various challenges in different markets are provided. The document concludes by discussing currencies and other considerations for doing business internationally.
This document provides an overview of topics related to international business and trade, including:
1. Actions governments can take to encourage international trade such as free-trade zones, free-trade agreements, and common markets.
2. Types of international trade barriers such as quotas, tariffs, and embargos imposed by governments. Cultural differences can also act as informal trade barriers.
3. Considerations for businesses operating internationally such as adapting marketing and business practices to local cultures and managing currency exchange rates.
The document discusses various topics related to international trade and business operations. It begins by asking students to read a handout about McDonald's community commitments. It then covers challenges and opportunities companies like McDonald's, Walmart, and Coke face when expanding internationally. These include dealing with formal trade barriers imposed by governments as well as informal cultural barriers. The document discusses how companies must adapt their marketing, operations, and business practices to different country contexts. It provides examples of product launches that failed due to cultural misunderstandings. Students are assigned homework to analyze challenges faced by Nike in comparison to these other companies.
This document summarizes key concepts from Chapter 4 on international business and marketing. It discusses reasons why nations trade, including expanding markets and making more efficient production systems. It also describes how nations measure international trade through balances of trade and payments. Finally, it outlines different levels of involvement for businesses entering global markets, from exporting to direct foreign investment, and strategies for operating internationally.
Nations trade because they specialize in different goods based on their resources and capital. When nations specialize, they are able to obtain goods they cannot produce through importing and exporting. International trade allows nations to benefit from comparative advantage and increases economic interdependence. However, trade also causes changes to domestic employment patterns and some job losses. Exchange rates affect trade by making exports more or less expensive depending on currency strength. Nations use trade barriers and trade agreements to influence trade balances and domestic industries.
The document discusses international trade, providing 5 reasons why trade occurs between countries: differences in technology, resource endowments, demand, economies of scale in production, and government policies. It also discusses Tunisia's balance of trade, exports/imports by category and country, terms of trade, and the relationship between foreign trade and national income. Several trade models are outlined, including absolute advantage, Ricardian, Heckscher-Ohlin, new trade theory, and the gravity model.
International business refers to commercial transactions that cross national borders, including trade of goods, services and economic resources between two or more countries. A multinational enterprise conducts business operations in multiple countries. Companies engage in international business to expand sales into new markets, access resources like labor at lower costs, and minimize risks by diversifying beyond their domestic market. The goal is typically company growth or expansion through a global business strategy.
This document discusses various aspects of globalization and international business. It describes how components of manufactured goods often come from multiple countries. It also defines key terms like multinational corporations, transnational corporations, and various regional trade agreements. It outlines challenges that global managers may face, such as currency fluctuations, cultural differences, intellectual property issues, and human rights concerns. It then discusses various methods for entering foreign markets and factors that contribute to success in global business.
International business; competitive advantages; evolution; nature of international business; reasons and stages of internationalisation; approaches and theories of international business; comparative cost advantage and problems of international business.
Barriers to international trade such as tariffs, non-tariff barriers, import/export costs, excise taxes, and currency fluctuations are implemented by governments to protect domestic industries and consumers. Tariffs are taxes on imported goods that generate revenue for the government. Non-tariff barriers include licensing and product standards that make foreign competition difficult. Import and export costs include transportation, duties, and taxes that determine the final price of imported goods. Excise taxes are levied on specific domestic products to influence consumption and raise government funds. Currency exchange rates affect the competitiveness of exports and imports and can impact trade balances.
This document provides an overview of key concepts in international business, including:
1) Why nations trade to boost economic growth and take advantage of factors of production in other countries.
2) Measurements of international trade such as balance of trade and balance of payments.
3) Barriers to international trade like cultural differences, economic differences, and various types of trade restrictions.
4) Organizations that work to reduce trade barriers and promote global economic cooperation, including the WTO and IMF.
5) Strategies companies use when entering global markets and developing an international business strategy.
GBY EDITH OSTAPIK AND KEI-MU YIEdith Ostapik is a rese.docxbudbarber38650
G
BY EDITH OSTAPIK AND KEI-MU YI
Edith Ostapik
is a research
associate in the
Philadelphia
Fed’s Research
Department.
This article is
available free of
charge at www.
philadelphiafed.org/econ/br/index.
International Trade:
Why We Don’t Have More of It
Kei-Mu Yi is a
vice president
and economist
in the Research
Department of
the Philadelphia
Fed. He is also
head of the
department’s
Macroeconomics section.
1 Source: The World Bank’s World
Development Indicators (we use the world
export share of world GDP). Since world
exports = world imports, imports have risen by
the same amount.
2 Previous Business Review articles have
questioned the extent to which globalization
has taken place. The article by Janet Ceglowski
reviews research on barriers to international
trade. Examining another dimension of
globalization, Sylvain Leduc explores the lack
of international diversification of investment
portfolios.
3 They estimate an overall average increase
of 74 percent in the prices of goods in these
countries.
Globalization has many facets.
One of the most important is the enor-
mous increase in international trade.
Over the past 40 years, world exports
as a share of output have doubled to
almost 25 percent of world output.1
However, despite globalization and
the increasing share of output that is
exported and imported internationally,
economic evidence suggests that sig-
nificant barriers to international trade
still exist.2 We will summarize the lat-
est developments in the measurement
of international trade barriers, drawing
mainly from a recent comprehensive
survey on the subject by James Ander-
son and Eric van Wincoop. In their
lobalization has led to an enormous increase
in international trade. Over the past 40
years, world exports as a share of output have
doubled to almost 25 percent of world output.
However, despite this enormous increase, economic
evidence suggests that significant barriers to international
trade still exist. In this article, Edith Ostapik and Kei-Mu
Yi summarize the latest developments in the measurement
of international trade barriers.
survey, these authors report estimates
of the magnitudes of different catego-
ries of international trade costs. They
find that, on average, international
trade costs almost double the price of
goods in developed countries.3
The primary policy implication of
the existing research is that globaliza-
tion still has a long way to go, so that
there is still plenty of room for trade
to grow. Growth in trade will likely
occur primarily through technological
changes that reduce transportation or
communication costs or from long-
run policy choices, such as a national
currency or language. Reduction in
policy-related barriers, such as tariffs,
will also play a role.
WHY AND HOW TRADE COSTS
REDUCE TRADE
The core idea underlying the
benefits of international trade goes
back to Adam Smith and his famous
pin factory para.
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1. 1
Chapter 4: International Business
What Is International Business?
A domestic transaction is the selling of items produced in the same
country.
An international transaction is the selling of items produced in other
countries. These items contribute to the global economy.
Benefits for Business
• access to markets
• cheaper labour
• increased quality of goods
• increased quantity of goods
• access to resources
2. 2
Chapter 4: International Business
What Is International Business?
Benefits for Business
Access to Markets
By trading abroad, Canadian businesses can gain access to markets
that are 200 times larger than those at home.
Customers in other parts of the world have different needs and wants.
Businesses must make adaptations to their products and services to
be successful in other countries.
A global product is a standardized item that is offered in the same
format in all countries.
Cheaper Labour
Lower prices as the result of cheap labour in other countries is the
number one reason why consumers buy items made in different parts
of the world.
3. 3
Chapter 4: International Business
What Is International Business?
Increased Quality of Goods
International business can help producers improve the quality of the
products they sell.
Increased Quantity
As long as a product has international appeal, so does the potential
for increased sales.
Access to Resources
Connections to international markets provides businesses with
increased access to the three types of economic resources: natural,
human, and capital.
4. 4
Chapter 4: International Business
What Is International Business?
The Five Ps of International Business
All countries benefit when businesses produce
specialized goods and services that appeal to
consumers.
International business provides increased markets
for businesses and offers them a broader choice of
products, services, and prices for its consumers.
The Five Ps of International Business
1. Product
2. Price
3. Proximity
4. Preference
5. Promotion
5. 5
Chapter 4: International Business
What Is International Business?
Product
A country’s resources determine what goods and services it
produces.
Price
The cost of producing goods and services varies from country to
country. Sometimes it may be more profitable for Canadian
businesses to produce products overseas and then ship them here to
sell to consumers. Lower foreign wages, taxes, and material costs
make it cheaper to produce products abroad rather than domestically.
Proximity
It may be more advantageous and profitable for some businesses to
sell products and services to consumers near a neighbouring
country’s border rather than to its domestic customers. For example,
80 percent of the Canadian population lives within 170 km of the
American border. Therefore, many Canadian businesses trade
extensively with Americans. The reverse is also true: Americans
market many of their goods and services to Canada.
6. 6
Chapter 4: International Business
What Is International Business?
Preference
Consumers often purchase foreign goods and
services based on their reputation and
specialization, even though similar products are
produced domestically. Two examples are Swiss
watches and Belgium chocolates.
Promotion
Technology, especially the Internet, makes it easy
for businesses to promote their products and
services internationally.
7. 7
Chapter 4: International Business
What Is International Business?
Costs of International Trade
The hidden or social costs often associated with international trade
include offshore outsourcing, human rights or labour abuses, and
environmental degradation.
Offshore Outsourcing
Offshore outsourcing occurs when businesses decide to produce
all or part of their goods in countries where labour costs are lower.
Some advantages include proximity to natural resources, more
efficient technology, indigenous innovation, and favorable tax
structures.
However, offshore outsourcing faces potential changes in the future
as companies may turn to transnational corporations that operate
in several countries to produce their goods and services.
8. 8
Chapter 4: International Business
What Is International Business?
Human Rights Issues and Labour Abuses
Some workers in poor countries face labour exploitation, such as
physical and sexual abuses, forced confinement, non-payment of
wages, denial of food and health care, and excessive working hours.
Child labour—the regular employment of boys and girls under the age
of 16—is commonly practiced in poor countries where the workforce is
often exploited.
Environmental Degradation
Sustainable development is the process of developing land, cities,
businesses, and communities that meet the needs of the present
generation without compromising those of the future.
Environmental degradation is the consumption of natural resources,
such as trees, water, earth, habitat, and air, faster that nature can
replenish them.
9. 9
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 a form of tax on certain types
of imports. 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.
10. 10
Chapter 4: International Business
What Is International Business?
Non-tariff Barriers
Non-tariff barriers are controls or standards for the quality of
imported goods set so high that foreign competitors cannot enter
the market.
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 the vendor cost, transportation
charges, duties, taxes, broker fees, and any other charges.
11. 11
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.
12. 12
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 in which a country pays more for imports than it
earns from exports
• a trade surplus in which a country earns more from exports
than it pays for imports
13. 13
Chapter 4: International Business
Flow of Goods and Services
Imports
Five Ways to Offset the Risk of Importing
1. Measure consumer interest.
2. Use care when selecting foreign suppliers.
3. Learn about a foreign partner’s culture.
4. Carefully scrutinize the purchase agreement and then sign it.
5. Check goods for quantity and quality upon arrival.
Exports
Direct exporting is exporting a product directly to an importer without
using an intermediary. Indirect exporting is exporting a product to an
intermediary who then conveys the product to the importer. Larger
established companies usually use direct exporting while newer ones
utilize indirect exporting.
14. 14
Chapter 4: International Business
Flow of Goods and Services
Offsetting Risks
Exporters reduce risks by planning carefully. As part of their plan,
they conduct market research to ensure that there are consumers for
their 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. low cost shipping due to proximity
2. similar cultures (language, interests, product interest, and so on
3. a market that is 10 timers larger than the domestic one
15. 15
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)
In 1947, the General Agreement on Tariffs and Trade (GATT) was
signed by 23 nations who were allies in World War II. The trade
agreement came into effective in 1948. Eventually, GATT grew to 115
member states before it was replaced by the World Trade Organization
(WTO) in 1995. Today the WTO is the principal international organization
that deals with rules of trade between nations.
16. 16
Chapter 4: International Business
Canada and International Trade
Agreements
North American Free Trade Agreement (NAFTA)
Canada-U.S. Free Trade Agreement (FTA) came into effect in January
1989. In 1994, Mexico, the United States, and Canada formed the
North American Free Trade Agreement (NAFTA).
Other Free Trade Agreements
Bilateral agreements involve Canada and one other country or group.
A trading bloc is a group of countries that share trade interests.
The Group of Eight (G8)
The Group of Eight (G8) is an association of the world’s most powerful
industrialized democracies. Meeting annually, the G8 deals with economic
and political issues facing their own countries and those of the larger
international community. Topics discussed include energy, employment,
the environment, human rights, and arms control.
17. 17
Chapter 4: International Business
The Future of International Trade
The Asia-Pacific Economic Corporation (APEC) is an economic
development organization formed in 1889. The Asia-Pacific
market is the fastest growing trade group.
European Union (EU)
In 1993, the European Union (EU) united 12 member states into
a true single market. Today the EU has 15 members and a
population of more that 370 million people.
Evolution of NAFTA
If NAFTA becomes a single market, it could result in workers from
the US, Canada, and Mexico moving freely between countries.
18. 18
Chapter 4: International Business
The Future of International Trade
Impact of Cultural Differences
International trade depends on our response to and acceptance of
cultural differences. Culture is the sum of a country’s way of life,
beliefs, and customs.
Dealing with People
Conducting successful business in foreign countries involves learning
what is important to their populations as well as its cultural nuances.
Punctuality
The value of punctuality depends on the cultures: some cultures value
timeliness, some do not. It is important to understand this before visiting
foreign countries. Other characteristics to recognize are working at an
acceptable pace, having good manners, and learning to avoid waits and
disappointments.
Greetings
Greeting someone can leave an important first impression.
19. 19
Chapter 4: International Business
The Future of International Trade
Nonverbal Communication Signals
Nonverbal signals can convey more than words do.
Good Manners
In Canada, the United States, and some European
countries, business is completed at a quick and efficient
pace. Most other countries prefer to get to know people
before any business is done.
Decision Making
In North America, decision making is typically top-down. In
other cultures, decisions are made from the bottom up.
Global Dependency
Global dependency exists when customers in one country
demand items that are created in another.
Editor's Notes
International transactions ( foreign trade ) involve creating, shipping, and selling foods and services across national boarders. The global economy is the exchange of goods and services among people in different countries throughout the world.
BENEFITS FOR BUSINESS? Access to Markets Examples of standardized, or global product are pencils, soccer balls, and cameras. Packages food items are not generally global products. Cheaper Labour Canadian businesses, in an attempt to lower costs of production, use cheap foreign labour to maximize profits.
BENEFITS FOR BUSINESS? Increased Quality of Goods Products such as luxury cars as parts manufactured in many different countries come together to form the finished product. Increased Quantity Companies may have to increase production to meet demand, this may means increased efficiency, longer hours of operation or the establishment of new facilities. Access to Resources Natural Resources : bamboo from China to make furniture Human Resources : cheap factory labour in India Capital Resources : specialized machinery made in Germany
THE FIVE Ps OF INTERNATIONAL BUSINESS As businesses expand internationally they create jobs at home and overseas. Knowledge that is exchanged, as a result of international business, it results in new approaches to production, marketing, and selling that benefits domestic consumers as well as producers. Political benefits also materialize, dialogue and understanding are improved and communication and respect are enhanced.
THE FIVE Ps OF INTERNATIONAL BUSINESS Product Due to out geographical location and seasonal climate change Canada imports crops (such as citrus all year and strawberries in the winter) from other countries. Canada exports products such as timber and grain that we have an abundance of. Price Lower production costs may mean lower prices for consumers, causing increased units sold, therefore improved profits. Proximity Historically trade between countries was heavily dependant on proximity; the closer a business or individual that you traded with the greater an asset they were to you or your business.
THE FIVE Ps OF INTERNATIONAL BUSINESS Preferences Some foreign products that Canadian consumers purchase due to preference are Belgian chocolate, Swiss watches, Australian wine, German cars, and Cuban cigars. Promotion Before global communication methods (such as satellite broadcasting and the Internet) businesses found it difficult to let others far away know about themselves. According to Interbrand Corp.’s website a business can develop a global brand name in three years by using the Internet. Easy promotion is an incentive for companies to create an international presence.
COSTS OF INTERNATIONAL TRADE Offshore Outsourcing Also, known as contracting out, offshore outsourcing is the practice of subcontracting work to other companies to lower costs or to focus on tasks done better. High-tech jobs and customer support services are commonly outsourced to India, China, and Costa Rica. Cost associated include salaries, benefits, training, and recruiting. Services (bookkeeping and accounting) can also be outsourced. Time differences allow work to be done overnight and submitted in the morning. Transnational ( multinational ) corporations operate in several nations.
COSTS OF INTERNATIONAL TRADE Human Rights Issues and Labour Abuses Sometimes the Canadian company outsourcing is not aware to the abuses. The International Labour Organization (ILO) is the UN specialized agency that seeks the promotion of social justice and internationally recognized human rights. The ILO estimates that there are nearly 700 000 child domestic workers in Indonesia. According to the the ILO girls under 16, doing housework and child care, is the largest category of child labour. Environmental Degradation Sometimes businesses ignore the damage growth causes in the name of business goals. Businesses should be aware of the impact that their procedures and policies have on the environment and invest in solutions.
BARRIERS TO INTERNATIONAL BUSINESS Canada prohibits the entry of goods such as illegal narcotics, certain weapons, and products made from endangered animals; print material that is obscene or that promotes hatred or treason. Goods coming into Canada have to inspected, accompanied by a valid permit, or have special packaging and labeling. The Canadian Food Inspection Agency tests of antibiotics, drugs, and hormones in meat, allergens and pesticides in good, and other threats to food safety. See Table 4.1, “Imported Goods That Require Permits, Inspection, or Special Packaging” on page 124. Tariffs Custom duties (tariffs) are an amount added by a country to the cost of an imported product. The duty is usually a percent of the price of the product, depending on the tariff of the country. Finance Canada monitors Canadian, and international, tariff polices to ensure the development of new polices that will best serve the Canadian economy. Effective January 1, 2005, the government eliminated tariffs on fibre, yarn, and textile inputs used by the apparel industry imports. This change saved the domestic industry more than $90 million.
BARRIERS TO INTERNATIONAL BUSINESS Non-tariff Barriers Standards for safety and environmental controls can limit the competition because of the cost to comply. Another barrier is the requirement of an expensive licence to sell goods in the country’s market. Customs inspections at a country’s border can also impose barriers. Costs of Importing and Exporting Price is based on the cost of manufacturing, plus the costs of storage, marketing, shipping, advertising, overhead, and the profit margins. Some examples of import/export costs include airfreight, translator, interest charges, labeling costs, etc. A foreign purchase is not always a better deal than a domestic purchase.
BARRIERS TO INTERNATIONAL BUSINESS Excise Taxes The Canadian government charges an excise tax of 10 cents per litre on gasoline ($4 billion per year) and provincial governments charge about 14.5 cents per litre. Excise taxes depend on the quantity or mass of an item. Excise taxes are used to raise money, sometimes to discourage purchase as in the case of tobacco (smoking), and to encourage consumers to buy Canadian. Currency Fluctuations Currency exchange rates have a big impact on doing business internationally.
The importation of goods and materials provides, more or less, jobs for Canadians. See Figure 4.2, “Canadian Imports and Exports for 2005”, on page 129. BALANCE OF TRADE Countries usually try to reduce high trade deficits because it means money is flowing out and fewer jobs are being provided. A manufactured good surplus can be good because the domestic production process means more Canadian jobs. In 2005, Canada had a trade surplus of just under $65 billion; as a result of the $85 billion trade surplus with the U.S. that countered the $20 billion trade deficit from all other international trading.
IMPORTS See figure 4.3, “Five Ways to Offset the Risks of Importing”, on page 130. EXPORTS Established companies usually export directly . Businesses that export directly often set up offices and sales staff in foreign countries or send a sales representative to the country. Many new companies use indirect exporting as they do not have the resources to establish abroad. Intermediaries are familiar with regulations, restrictions and culture. Intermediaries handle paperwork, collect money, and can assume risk. Some countries such as the Middle East, Central America, and Asia do not allow direct exporting, probably to create domestic jobs.
EXPORTS Offsetting Risks Sources of information to reduce risk include: Foreign Affairs International Trade Canada Internet Asia Pacific Foundation of Canada Canadian Manufacturers and Exporters Canadian Association of Importers and Exporters Canadian Embassies See questions that embassy staff suggest foreign clients might ask, on page 131. CANADA’S MAJOR TRADING PARTNERS A Canadian product or service sold in both the Canadian and U.S. markets will be far more profitable than a product sold only in Canada. See Table 4.2, “Canada’s Top 10 Export & Import Markets by Country, 2005”, page 133.
Initial trade agreements usually start out dealing with importing and exporting. Agreements usually address tariff elimination or reduction, and processes for resolving disputes. Agreements should also include issues such as when and why people will be permitted to work across international boarders, qualifications needs, standards applied to their work, and how intellectual property will be protected. Intellectual property is a business’s trade secrets or the ideas or talent of its workforce. WORLD TRADE ORGANIZATION (WTO) An international organization was set up to help GATT negotiate trade deals, resolve problems, and collect data. An important WTO agreement is the 1995 General Agreement on Trade in Services (GATS) that sets guidelines for the trade of services (such as banking). The WTO governs about 97% of all world trade.
NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) Canada hoped to gain, with the FTA , stable access to U.S. markets, clarify government assistance to industry, ability of Canadian companies to bid on U.S. government contracts, and allow Canada an equal say in disputes. The U.S. wanted to clarify rules regarding services and intellectual property, reduce restrictions on investment in Canadian industries, and increase exports to Canada with the FTA . See Table 4.3, “Canada-U.S. Free Trade Agreement (FTA) (1989)”, on page 136. NAFTA created a continent-wide free-trade zone. Products made within the free-trade zone could be traded across the boarders without tariffs. Each day, Canada, U.S., and Mexico conduct nearly $1.7 billion in trilateral trade. See Table 4.4, “North American Free Trade Agreement (NAFTA) (1994)”, on page 136. OTHER FREE TRADE AGREEMENTS Canada has bilateral free trade agreements with Chile and Israel. Canada is negotiating agreements with Costa Rica and a trading bloc made up of Guatemala, El Salvador, Honduras, and Nicaragua. See Table 4.5, “Other Free Trade Agreements”, on page 138. THE GROUP OF EIGHT (G8) The G8 (1975) is made up of Britain, France, Germany, Italy, Canada, United States, Japan (original Group of Seven (G7)), and Russia (joined in 1998).
APEC is based on consensus and voluntary participation. EUROPEAN UNION (EU) EU members in 1993 were Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, and the United Kingdom (UK). In 1993 Austria, Finland, and Sweden joined the EU. A single currency, the euro, is used by member countries except the UK and Denmark. The EU has its own elected government and citizens can move freely from one country to another. The EU members could be 28 countries by 2010. EVOLUTION OF NAFTA A single market would mean American and Mexican workers could vie for Canadian jobs in Canada. A single currency could also evolve.
IMPACT OF CULTUREAL DIFFERENCES Culture influences what can and can not be done, of what is acceptable and unacceptable. Culture can be learned. Operating in different cultures requires research that looks at important social and environmental issues and demographic characteristics that shape the market. Greetings Handshakes are common in most countries, but they are not all done the same way. A single shake in France is acceptable. Eye contact is polite in most cultures, in some however averting your eyes is a sign of respect.
IMPACT OF CULTUREAL DIFFERENCES Nonverbal Communication Signals Asian businesspeople often do not say “no”, they use body language especially to convey a negative response. People in Bulgaria say “yes” with a side-to-side shake of the head, while “no” is a nod up and down. The “okay” sign, is an offensive gesture in Brazil and the symbol for money in Japan. Proximity and touching are also communication signals interpreted differently from country to country. Good Manners Asian and Latin America are countries were the three Fs of business – family, friends, and favours, have a very strong influence on the business decisions people make. Decision Making Latin America uses the typical top-down approach. When many people, from the bottom up, are consulted decisions may take longer to make. GLOBAL DEPENDENCY Global communication (television, movies, satellite communications, and the Internet) aid in global awareness. Global dependency will increase, as communication technology advances.