Future of Business - Althouse: Chapter 5

Exchange Controls

Laws that require a company earning foreign exchange from its exports to sell the foreign exchange to a control agency, such as a central bank.

Licensing

Legal Process whereby a company allows to let another company use a manufacturing process, trademark, patent, trade secret, or other proprietary knowledge in turn for being paid an agreed amount.

NAFTA

North American Trade Agreement (Includes Canada, USA, Mexico)

Dumping

The practive of charging a lower price for a product in foreign markets than in the company's home market. - Unfairly low prices - Harms domestic Market

Natural Barriers of International Trade

- Distance - Language - Culture - Legal and Regulatory

Imports

A good bought in a country in which it was not made in.

Tariff

A tax imposed on imported goods.

Embargo

A total ban on imports or exports of a product.

International Monetary Fund (IMF)

Gives short term loans to developing countries.

Exports

Goods made in one country and sold outside of that country.

Trade Defficit

Imports > Exports

World Bank

Offers low interest loans to developing nations as well as advice and information. Countries must pledge to lower trade barriers and encourage private enterprise in order to get a loan.

Balance of Payments

Summary of a country's international financial transactions showing the difference between the country's total payments and total receipts from other countries.

Protective Tarrifs

Tariffs that are imposed to make imports less attractive to buying than domestic products.

Balance of Trade

The difference between the value of a country's imports and exports.

Direct Foreign Investment

Active ownership of a foreign company or manufacturing or marketing facility in a foreign country.

World Trade Organization (WTO)

An organization established in 1994 to oversee international trade, reduce trade barriers, and resolve disputes among member nations.

ASEAN

Association of Southeast Asian Nations

Mercosur

Common market of the south (south american) includes Argentina, Brazil, Paraguay, Uruguay, and Venezuela

EU

European Union

Trade Surplus

Exports > Imports

Customs Regulations

Regulations on products that are different from generally accepted international standards.

Joint Venture

A business agreement in which two or more businesses agree to pool their resources for a specific project or business venture.

Contract Manufacuring

A foreign company manufactures private label goods under a domestic company's brand.

Countertrade

A form of international trade in which part or all of the payment for goods or services is in the for of other goods or services (basically bartering).

Import Quota

A limit on the quantity of a certain good that can be imported. also known as a quantitative restraint.

Economic Environment

Infrastructure: basic institutions and public facilities on which an economy's development depends.

Nationalism

The sense of a national consciousness that boosts the culture and interests of on country over those of all other countries.

Floating Exchange Rates

A system in which prices of currencies move up and down based on the demand and supply of various currencies.

Multinational Corporation

Corporations that move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.