International Business Law Chapter 1

General Agreement on Tariffs and Trade

Agreement between nations, first signed in 1947, and continually expanded since that time, that sets the rules for how nations will regulate international trade in goods and services.

Export Management Companies

Are independent firms that assume a range of export-related responsibilities for manufacturers, producers, or other exporters.

Export Plan

Assessing the firm's readiness for export, Making a long-term commitment to exporting and to foreign customers, Identifying foreign-market potential, Identifying the risks involved in exporting, Evaluating the legal aspects of the firm's export plan.

Non-tariff Barriers

Barriers to importing or exporting other than tariffs.

Franchising

Business arrangement that utilizes an agreement to license, control, and protect the use of the franchiser's patents, trademarks, copyrights, or business know-how, combined with a proven plan of business operation, in return for royalties, fees, or commissions.

Export Trading Companies

Companies that market the products of several manufacturers in foreign markets.

Licensing agreements

Contracts by which the holder of intellectual property will grant certain rights in that property to a foreign firm under specified conditions and for a specified time.

Trade Liberalization

Efforts of governments to reduce tariffs and non-tariff barriers to trade.

Importing

Entering of goods into the customs terri- tory of a country or the receipt of services from a foreign provider.

Common markets

Free trade areas.

Patents

Governmental grants to inventors ensuring them the exclusive legal right to produce and sell their inventions for a period of years.

Intellectual Property Rights

Grant from a government to an individual or firm of the exclusive legal right to use a copyright, patent, or trade- mark for a specific amount of time.

Tariffs

Import duties or taxes imposed on goods entering the customs territory of a nation.

Foreign Distributors

Independent firms, usually located in the country to which a firm is exporting, that purchase and take delivery of goods for resale to their customers.

Trademarks

Legal rights to a name or symbol that identifies a firm or its product.

Copyrights

Legal rights to artistic or written works, including books, software, films, or music, or to such works as the design of a computer chip.

Business Operations Franchise

Most common form of franchising is known usually used in retailing.

Foreign Direct Investment

Refers to the ownership and active control of the productive assets of ongoing business concerns by an investor in a foreign country.

Boycott

Refusal to trade or do business with certain firms, usually from a particular country, on political or other grounds.

Quota

Restriction imposed by law on the numbers or quantities of goods, or of a particular type of good, allowed to be imported.

Export Control

Restriction on exports of goods, services, or technology to a country or group of countries imposed for reasons of national security or foreign policy.

Absolute Advantage

States that nations should concentrate their efforts on producing those goods that they can make most efficiently, with a minimum of effort and waste.

Global Sourcing

Term commonly used to describe the process by which a firm attempts to locate and purchase goods or services on a worldwide basis.

Comparative Advantage

The costs of production and price received for the goods allow the goods to be sold for a higher price in a foreign country than at home.

Exporting

The shipment of goods out of a country or the rendering of services to a foreign buyer located in a foreign country.

Embargo

Total or near-total ban on trade with a foreign country or countries.

Direct Exporting

Type of exporting where the exporter, often a manufacturer, assumes responsibility for most of the export functions.

Infringement

Unauthorized use or "piracy" of its copyrights, patents, or trademarks by unscrupulous persons not party to the licensing agreement.

Indirect Exporting

Used by companies that do not have the experience, personnel, or capital to tackle a foreign market.

U.S. Export Trading Company Act

Waives the application of U.S. antitrust laws to export activities.

World Trade Organization

Was created to administer the rules and to assist in settling trade disputes among its member nations.