BA101-3

embargo

A complete halt to trading with a particular nation or in a particular product.

licensing

A contractual agreement in which one firm permits another to produce and market its products and use its brand name in return for a royalty or other compensation.

multinational enterprise

A firm that operates on a worldwide scale without ties to any specific nation or region.

import quota

A limit on the amount of a particular good that may be imported into a country during a given period of time.

trade deficit

A negative balance of trade.

non-tariff barrier

A non-tax measure imposed by a government to favor domestic over foreign suppliers.

strategic alliance

A partnership formed to create competitive advantage on a worldwide basis.

foreign-exchange control

A restriction on the amount of a particular foreign currency that can be purchased or sold.

import duty(tariff)

A tax levied on a particular foreign product entering a country.

international business

All business activities that involve exchanges across national boundaries.

Export-Import Bank of the United States

An independent agency of the U.S. government whose function is to assist in financing the exports of American firms.

International Monetary Fund(IMF)

An international bank with 186 member nations that make short-term loans to developing countries experiencing balance-of-payment deficits.

counter-trade

An international barter transaction.

General Agreement on Tariffs and Trade(GATT)

An international organization of 153 nations dedicated to reducing or eliminating tariffs and other barriers to world trade.

multilateral development bank(MDB)

An internationally supported bank that provides loans to developing countries to help them grow.

economic community

An organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies.

absolute advantage

The ability to produce a specific product more efficiently than any other nation.

comparative advantage

The ability to produce a specific product more efficiently than any other product.

currency devaluation

The reduction of the value of a nation's currency relative to the currencies of other countries.

balance of payments

The total flow of money into a country minus the total flow of money out of that country over some period of time.

balance of trade

The total value of a nation's exports minus the total value of its imports over some period of time.

letter of credit

Issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary.

draft

Issued by the exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank.

World Trade Organization(WTO)

Powerful successor to GATT that incorporates trade in goods, services, and ideas.

trading company

Provides a link between buyers and sellers in different countries.

importing

Purchasing raw materials or products in other nations and bringing them into one's own country.

exporting

Selling and shipping raw materials or products to other nations.

dumping

Exportation of large quantities of a product at a price lower than that of the same product in the home market.

bill of lading

Document issued by a transport carrier to an exporter to prove that merchandise has been shipped.