intro business ch. 3
competing in global markets
Terms
undefined, object
copy deck
- general agreement on tariffs and trade [GATT]
- a 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions
- common market
- a regional group of countries that have a common external tariff, no internal tariffs, and a coordination of laws to facilitate exchange; also called a trading bloc. ex. is the european union
- world trade organization [WTO]
- the international organization that replaced the General Agreement on Tariffs and Trade, and was assigned the duty to mediate trade disputes among nations
- balance of payment
- the difference between money coming into a country from exports and money leaving the country from imports, plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investment
- import quota
- a limit on the number of products in certain categories that a nation can import
- central american free trade agreement [CAFTA]
- created a free-trade zone with central american nations; costa rica, dominican republic, el salvador, guatemala, honduras and nicaragua
- tariff
- a tax imposed on imports
- devaluation
- lowering the value of a nations currency relative to other currencies
- free trade
- the movements of goods and services among nations without political or economic barriers
- counter-trading
- a complex form of bartering in which several countries may be involved, each trading goods for goods or services for services
- licensing
- a global strategy in which a firm [ the licensor ] allows a foreign company to produce its product in exchange for fee [a royalty]
- trade protectionism
- the use of government regulations to limit the import of goods and services
- foreign direct investment
- the buying of permanent property and businesses in foreign nations
- strategic alliance
- a long-term partnership between two or more companies established to help each company build competitive market advantages
- north american free trade agreement [NAFTA]
- agreement that created a free-trade area among the united states, canada and mexico
- ethnocentricity
- an attitude that one's own culture is superior to all others.
- foreign subsidiary
- a company owned in a foreign country by another company [ called the parent company ]
- exporting
- selling products to another country
- embargo
- a complete ban on the import or export of a certain product or stopping all trade with a particular country
- expropriation
- should relations with a host country faulter; the firms assets could be taken by the foreign government in which its invested
- joint venture
- a partnership in which two or more companies [ often from different countries ] join to undertake a major project
- importing
- buying products from another country
- absolute advantage
- the advantage that exists when a country has a monopoly on producing or is able to produce it more efficiently than all other countries
- balance of trade
- the total value of nations exports compared to its imports measured over a particular period
- multinational corporation
- an organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management
- trade deficit
- an unfavorable balance of trade; occurs when the value of a country's imports exceeds that of exports
- comparative advantage theory
- theory that states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently
- contract manufacturing
- a foreign country's production of private-label goods to which a domestic company the attaches its brand name or trademark
- exchange rate
- the value of one nations currency relative to the currencies of other countries
- dumping
- selling products in a foreign country at lower prices than those charged in the producing country