International marketing 2 : International Trade

DMK2013International Marketing

Chapter 2: The Dynamic Environment of International Trade

Sakinah Shukri @MSUmalaysia

World Trade

Trade : Transfer of ownership of goods from one person to another by getting something in exchange from buyer

International Trade: beyond national boarders

Why we need International Trade-Globalize our product-Demand from other country-Competition

International Trade

http://www.trade.gov/mas/ian/build/groups/public/@tg_ian/documents/webcontent/tg_ian_003364.pdf

The system of accounts that records a nations international financial transactions.

Maintained on a double entry bookkeeping Transaction is annually and need to be

balanced International Economic Position (central

bank, gov agency, treasuries )

Balance of Payment

1.Current Account (Value.of Company)exports, imports, service to transfer fund

activity2.Capital Account Direct investment, portfolio investment, short

term capital movement3.Reserves AccountExport and imports of gold

3 ACCOUNT (BOP) PG34

Foreign exchange & liabilities

A Economic policy of retraining trade to protect the infant market

It will help to protect fair competition between goods and services

8 Policies

Protectionism

Protect of infant industry Protect home market Need to keep money at home market Encouragement of capital accumulation Maintenance of the standard of living and

real wages Conservation of natural resources National Defense Bargaining

Why we need Protectionism (pg35)

Government establish the barrier, control activity

Tariffs Quotas Voluntary Exports Restraints (VER) Boycotts and embargoes Monetary Barriers Standards Anti dumping penalties

Trade Barrier (PG37)

1. Tariffs- tax imposed by a government on goods entering at its borders

2. Quotas- specific unit or dollar limit applied to a particular of goods

3. Voluntary Export Restraints- Similar to quotas but follow market agreement (Textile)

4. Boycott and Embargoes- gov restriction against a particular product

5. Monetary Barrier- through blocked currency and exchange rate

6. Standards- protect and check quality and health

New anti dumping penalties had emerged to form a new tariff and non tariff.

Keeping foreign market out of a market “Predatory market”- a foreign producer

intentionally sells its product in the United States for less than the cost of production.

Anti Dumping Penalties

General Agreement on Tariffs and Trade 1. Trade shall be conducted on a non

discriminatory basis2. Protection shall be afforded to domestic

industries through customs tariffs3. Consultation shall be the primary method

used to solve global trade problems-legal basis for further negotiations and aimed

eliminating barriers

GATT

World Trade Organization - Sets many rules governing trade- Provide a panel exports to hear and

systemize rules- Issues binding decision - Equal representative- Bond their market and open more activity

WTO (PG 44)

Global Institutional Help to maintain stability in the financial

markets and by assisting countries that are seeking economic development and structure

Stabilize foreign exchange rate Promote growth international trade

IMF (pg45)

Reduce poverty and improve standard of living

1. Lending money to gov2. Assistance to gov development project3. Lending money to private sector 4. Provide investor “non commercial risk”5. Promote growth of international investment

World Bank Group

WTO http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm

Sak.Onkvisit., & John J.Shaw.,(2009) International Marketing: Strategy and theory.5th edn.Milton Park.Routledge

http://www.oecd.org/eco/growth/2501905.pdf (Trading between Develop and Developing Countries)

Reference