Chapter 02 The Dynamic Environment of International Trade

7/21/2019 Chapter 02 The Dynamic Environment of International Trade

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Chapter 2

The Dynamic Environment ofInternational Trade

International Marketing15thedition

Philip R. Cateora Mary C. !illy and "ohn #. !raham


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2Top Ten 2$$% &.'. Trading Partner()* +illion( merchandi(e trade,

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hibit 2.1


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2Beyond the First Decadeof the 21stCentury (1 of 2)

!ro-th of the &.'. economy (lo-ed dramatically inthe la(t fe- year( e(pecially in 2$$%

Economie( of the developed -orld epected onaverage to gro- ann/ally at 0 for the net 25 year(

)ECD, Economie( of the developing -orld epected on

average to gro- ann/ally at 3 for the net 25 year()ECD,

4( a re(/lt economic po-er and infl/ence -ill movea-ay from ind/(trialied nation( to developingnation( )#atin 4merica 4(ia Ea(tern E/rope and4frica,

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2Beyond the First Decadeof the 21stCentury (2 of 2)

Companie( are looking for -ay( to +ecome moreefficient improve prod/ctivity and epand theirglo+al reach -hile maintaining an a+ility tore(pond 6/ickly and deliver prod/ct( that the

market( demand. 7e(tle 'am(/ng 8hirlpool

'maller companie( al(o /(ing novel approache(

to target glo+al market( 7ochar Inc. )fire retardant,

9/tronic( Inc. )promotional lapel +/tton(,

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2ProtectionLogic and Illogic 4rg/ment( for protectioni(m:

Protection of infant ind/(try

Protection of the home market

7eed to keep money at home

Enco/ragement of capital acc/m/lation

Maintenance of the (tandard of living and real -age(

Con(ervation of nat/ral re(o/rce(

Ind/(trialiation of a lo-;-age nation

Maintenance of employment and red/ction of /nemployment

7ational defen(e Increa(e of +/(ine(( (ie

Retaliation and +argaining

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2Does Protectionism elp!

4 recent (t/dy on 21 protected ind/(trie( (ho-ed that-hile


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2"rade Barriers

Tariff( ?/ota( and Import #icen(e(

@ol/ntary Eport Re(traint( )@ER,

9oycott( and em+argoe(

Monetary +arrier( 9locked c/rrency

!overnment approval

'tandard(

4ntid/mping penaltie(

Dome(tic (/+(idie( and economic (tim/li

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2"rade Barriers

Tariff( are tae( impo(ed +y a government on good(entering it( +order(.

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IncreaseIncrease

#ea$en#ea$en

Restrict

Inflationary pre((/re( (pecial intere(t(A privilege(

government control and political con(ideration( ineconomic matter( and the n/m+er of tariff(

9alance;of;payment po(ition( (/pply and demandpattern( and international relation( +y (tarting trade

-ar(

Man/fact/rerA( (/pply (o/rce( choice( availa+le tocon(/mer( and competition


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2"rade Barriers

?/ota( and Import #icen(e( ?/ota i( a (pecific /nit or dollar limit applied to a

partic/lar type of good )increa(e( price of good,

Import licen(e( limit( 6/antitie( on a ca(e;+y;ca(e +a(i(

"apan and foreign riceB 9anana -ar( +et-een the &nited'tate( and the E&

@ol/ntary Eport Re(traint( )@ER, ften /(ed in the 1%$( i( an agreement +et-een the

importing co/ntry and the eporting co/ntry for are(triction on the vol/me of eport(.

"apanA( @ER on &.'. a/tomo+ile(

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2"he %eneral &greement on"ariffs and "rade (%&"") 'hortly after 8orld 8ar II the &.'. and 22 other co/ntrie(

(igned !4TT )1%=, -hich paved the -ay for the fir(t effective-orld-ide tariff agreement

9a(ic element( of the !4TT

Trade (hall +e cond/cted on a nondi(criminatory +a(i(

Protection (hall +e afforded dome(tic ind/(trie( thro/ghc/(tom( tariff( not thro/gh (/ch commercial mea(/re( a(import 6/ota(

Con(/ltation (hall +e the primary method /(ed to (olve glo+altrade pro+lem(

Eliminating international trade +arrier( &r/g/ay Ro/nd The !eneral 4greement on Trade in 'ervice( )!4T',

Trade;Related Inve(tment Mea(/re( )TRIM(,

Trade;Related a(pect( of Intellect/al Property Right( )TRIP(,

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2"he #orld"rade 'rganiation (#"')

8T -hich i( an in(tit/tion not an agreement -a( fo/ndedin 1%%. 'et( many r/le( governing trade +et-een it( 1 mem+er(

Provide( a panel eport( to hear and r/le on trade di(p/te(+et-een mem+er(

I((/e( +inding deci(ion( 4ll mem+er co/ntrie( -ill have e6/al repre(entation

Mem+er co/ntrie( have open their market( and to +e +o/nd +ythe r/le( of the m/ltilateral trading (y(tem

&.'. ratification concern(

Po((i+le lo(( of (overeignty over it( trade la-( to 8T #ack of veto po-er

Role &.'. -o/ld a((/me -hen a conflict ari(e( over an individ/al(tateA( la-( that might +e challenged +y a 8T mem+er

China +ecame mem+er of the 8T )2$$1,B @ietnam )2$$=,

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2$irting the spirit of%&"" and #"'

#oophole( China red/ced tariff( -hile at the (ame time

increa(ed n/m+er and (cope of technical

(tandard( and in(pection re6/irement( Impo(ing antid/mping d/tie(

7egotiating +ilateral trade agreement(

May lead to m/ltinational conce((ion( 7ot nece((arily con(i(tent -ith 8T goal(

and a(piration(

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2International *onetary Fund(I*F)

9eca/(e of inade6/ate money re(erve(and /n(ta+le c/rrencie( the IMF -a(created to a((i(t nation( in +ecoming and

remaining economically via+le +


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2#orld Ban$ %roup

9y promoting (/(taina+le gro-th and inve(tment in peoplethe 8orld 9ank !ro/p i( an in(tit/tion created in 1% tored/ce poverty and improve (tandard of living

The 8orld 9ank ha( five in(tit/tion( -hich perform thefollo-ing (ervice(:

#ending money to the government( of developing co/ntrie(

Providing a((i(tance to government( for developmental pro


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2&nti+glo,aliation Protests

The /nintended con(e6/ence( of glo+aliing Environmental concern(

8orker eploitation and dome(tic

Chapter 02 The Dynamic Environment of International Trade

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