Trend 1: decline of economic protectionism by individual countries
Trend 2: Rise of economic integration and free trade among nations.
Trend 3: Global competition among global companies for global consumers
Trend 4: Emergence of a networked global marketplace.
How can a country protect its economy? A country can protect its economy through tariffs or quotas.
Describe GATT and WTO. - The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business. (GATT)- The General Agreement on Tariffs and Trade (GATT) was implemented to further regulate world trade to aide in the economic recovery following the war. GATT's main objective was to reduce the barriers of international trade through the reduction of tariffs, quotas and subsidies.
What is NAFTA? What countries participate in NAFTA? NAFTA is the North American Free trade agreement that stimulated trade flows among member nations. Mexico ,Canada and the United States participate in NAFTA
Tariff – A tax on the price of imported or exported goods.
Quota- A restriction placed on the amount of a product allowed entering or leaving a country.
Free trade zone- Specially designated geographical areas within a nation that are exempt from the regulations and taxation normally imposed on business. They are intended to facilitate cross border production and trade.
How do these factors affect a firm when marketing globally?
Economic environment- The totality of economic factors, such as employment, income, inflation, interest rates, productivity, and wealth, that influences the buying behavior of consumers and institutions. This is important because Businesses need to know factors such as a countries purchasing power and the currency exchange rates between certain countries.
Political-legal environment- The basic understanding of the political legal environment is when the government implements’ laws and or regulations which affect the way a business operate. Important factors to take into consideration for Business such as the Political stability of a country, trade regulations.
Cultural environment-Businesses must understand the similarities and differences among consumers regarding Values, Customs Cultural symbols and language.