Upgrade to remove ads
Chapter 3: Exploring Global Business
Terms in this set (55)
selling and shipping raw materials or products to other nations.
purchasing raw materials or products in other nations and bringing them into one's own country.
balance of trade
the total value of a nation's exports minus the total value of its imports over some period of time.
a negative balance of trade.
balance of payments
the total flow of money into a country minus the total flow of money out of that country over some period of time.
balance of payments includes:
investments, money spent by foreign tourists, payments by foreign governments, aid to foreign governments, and all other receipts and payments
a contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation.
letter of credit
issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary.
bill of lading
document issued by a transport carrier to an exporter to prove that merchandise has been shipped.
issued by the exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank.
a partnership formed to achieve a specific goal or to operate for a specific period of time
totally owned facility
a firm's own production and marketing facilities in one or more foreign nations.
provides complete control over operations, but it carries a greater risk than the joint venture
Two forms of Direct investment
firm builds or purchases manufacturing and other facilities in the foreign country
the purchase of an existing firm in a foreign country under an arrangement that allows it to operate independently of the parent company
a partnership formed to create competitive advantage on a worldwide basis.
provides a link between buyers and sellers in different countries.
an international barter transaction.
a firm that operates on a worldwide scale without ties to any specific nation or region.
Reasons Against Trade Restrictions
Higher prices for consumers
Restriction of consumers' choices
Misallocation of international resources
Loss of jobs
General Agreement on Tariffs and Trade (GATT)
an international organization of 160 nations dedicated to reducing or eliminating tariffs and other barriers to world trade.
Famous principle of GATT
Most-favored-nation status (MFN) meant that each GATT member nation was to be treated equally by all contracting nations.
From 1947 to 1994, Three of the most fruitful GATT sponsored rounds of negotiations to reduce trade restrictions were:
the Kennedy Round
the Tokyo Round
the Uruguay Round
The Kennedy Round (1964-1967)
In 1962, the United States Congress passed the Trade Expansion Act. This law gave President John F. Kennedy the authority to negotiate reciprocal trade agreements that could reduce U.S. tariffs by as much as 50 percent.
The Tokyo Round (1973-1979)
completed in 1979. The participants negotiated tariff cuts of 30 to 35 percent
removed or eased nontariff barriers like import quotas, unrealistic quality standards for imports, and unnecessary red tape in customs procedures.
The Uruguay Round (1986-1993)
most ambitious and comprehensive global commercial agreement in history
extended trade liberalization and widened the GATT treaty to include textiles, agricultural products, business services, and intellectual-property rights.
The Uruguay Round provisions:
lowered tariffs by greater than one-third
reformed trade in agricultural goods,
wrote new rules of trade for intellectual property and services,
strengthened the dispute-settlement process
World Trade Organization (WTO)
powerful successor to GATT that incorporates trade in goods, services, and ideas.
established by GATT to oversee the provisions of the Uruguay Round and resolve any resulting trade disputes.
Membership in the WTO obliges:
160 member nations to observe GATT rules
an organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies.
The European Union (EU)
formed in 1957 by six countries—France, the Federal Republic of Germany, Italy, Belgium, the Netherlands, and Luxembourg.
Objective of the The European Union (EU)
Freely conducted commerce among member nations and others that might later join
single currency of the European Monetary Union nations.
The North American Free Trade Agreement (NAFTA)
core goals of expanding trade and investment between the United States, Canada, and Mexico
The implementation of NAFTA was:
January 1, 1994
NAFTA was built on:
the Canadian Free Trade Agreement, signed by the United States and Canada in 1989, and on the substantial trade and investment reforms undertaken by Mexico since the mid-1980s
Critics maintain that NAFTA:
has not achieved its goals
has resulted in job losses
hurts workers by eroding labor standards and lowering wages
undermines national sovereignty and independence
does nothing to help the environment, and
hurts the agricultural sector
proponents of NAFTA maintain:
has contributed to significant increases in trade and investment
has benefited companies in all three countries
has resulted in increased sales, new partnerships, and new opportunities
has created high-paying export-related jobs, and
better prices and selection in consumer goods
Central American Free Trade Agreement (CAFTA)
created in 2003 by the United States and four Central American countries—El Salvador, Guatemala, Honduras, and Nicaragua
third-largest U.S. export market in Latin America, behind only Mexico and Brazil
Association of Southeast Asian Nations
established in 1967 to promote political, economic, and social cooperation among its seven member countries: Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, and Vietnam.
The Commonwealth of Independent States
established in December 1991 by the newly independent states as an association of 11 republics of the former Soviet Union.
Trans-Pacific Partnership (TPP)
established to boost economies of the member countries, lower barriers to trade and investment, increase exports, and create more jobs.
TPP formed by:
Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States
the Common Market of the Southern Cone (MERCOSUR)
established in 1991 under the Treaty of Asuncion to unite Argentina, Brazil, Paraguay, and Uruguay as a free-trade alliance
The Organization of Petroleum Exporting Countries
founded in 1960 in response to reductions in the prices that oil companies were willing to pay for crude oil.
organization conceived as a collective bargaining unit to provide oil-producing nations with some control over oil prices.
National Export Initiative (NEI)
federal agencies assist U.S. firms in developing export-promotion programs
NEI export services and programs of these agencies can help American firms to:
compete in foreign markets and create new jobs in the United States.
Export-Import Bank of the United States
an independent agency of the U.S. government whose function is to assist in financing the exports of American firms.
multilateral development bank (MDB)
an internationally supported bank that provides loans and grants to developing countries to help them grow.
MDB loans and grants help developing countries to:
supply safe drinking water
build schools and train teachers
increase agricultural productivity
expand citizens' access to markets, jobs, and housing
improve health care and access to water and sanitation
manage forests and other natural resources
build and maintain roads, railways, and ports, and
reduce air pollution and protect the environment.
The Inter-American Development Bank
created in 1959 by 19 Latin American countries and the United States
makes loans and provides technical advice and assistance to countries
Asian Development Bank (ADB)
created in 1966 and headquartered in the Philippines, promotes economic and social progress in Asian and Pacific regions.
African Development Bank (AFDB)
goal is to foster the economic and social development of its African members through loans, research, technical assistance, and the development of trade programs
European Bank for Reconstruction and Development
Established in 1991 to encourage reconstruction and development in the Eastern and Central European countries
International Monetary Fund (IMF)
an international bank with 188 member nations that makes short-term loans to developing countries experiencing balance-of-payment deficits.
Created in 1945 and headquartered in Washington, DC, the IMF'S main goals are to:
promote international monetary cooperation
facilitate the expansion and balanced growth of international trade
promote exchange rate stability
assist in establishing a multilateral system of payments, and
make resources available to members experiencing balance-of-payment difficulties.
THIS SET IS OFTEN IN FOLDERS WITH...
BSAD 1010 Ch4 self test
(Chapter 2) Business Ethics & Social Responsibility
Honest Tea Q&A Summer Refreshers
YOU MIGHT ALSO LIKE...
Chapter 3: Exploring Global Business
Chapter 8: Global Trade
Chapter 3 - Exploring Global Business
OTHER SETS BY THIS CREATOR
Molecular Compound Prefixes
OTHER QUIZLET SETS
③ Pair & Share 3 Lesson 3 Vocabulary
Culinary Skills | Kitchen Basics