Doing Business Internationally and Regulations
tariffs
a tax on imported goods
In addition to NAFTA, Highlight two other important regional trade agreements.
CAFTA-DR KORUS FTA
Distribution agreement
a contract between a seller and a distributor of the seller's products setting out the terms and conditions of the distributorship
Normal trade relations (NTR) status
a status granted through an international treaty by which each member nation must treat other members at least as well as it treats the country that receives its most favorable treatment
Restrictions on technology exports. Under the export administration act of 1979, the flow of technologically ___________ products and _____________ data can be restricted.
advanced technical
quotas
an assigned import limit on goods
Export Quotas. ____________ sets export quotas on various items, such as grain being sold abroad.
congress
In ________________ exporting, a U.S. company signs a sales contract with a foreign purchaser that provides for the conditions of shipment and payment for the goods.
direct
Microlex, Inc., a U.S. corporation, signs a sales contract with Freres, S.A., a French corporation, in which Microlex agrees to sell Freres $100,000 worth of Microlex products. This is an example of
direct exporting
When a foreign country becomes a big market, the U.S. firm may wish to appoint a ________________ located in that country
distributor
The primary purpose of the North American Free Trade Agreement is to:
eliminate tariffs among the US, Canada, and Mexico
Firms investing in foreign nations run all of the following risks EXCEPT:
excessive profits
The four ways in which US domestic firms can engage in international business transactions
exporting their goods establishing foreign production facilities licensing technology to existing foreign companies selling franchises to oversea entities
Dunkin Donuts licenses Nadia to use its trademark, trade name, and recipes to produce and sell donuts in Romania. Payment by Nadia will include a set-up fee, plus a small royalty on all revenues generated in Romania. This type of business arrangement is most likely a(n)
franchise
the main reason that US firms establish manufacturing plants abroad is that
in so doing they reduce costs
Incentives and Subsidies. The United States ( and other nations ) also uses _______________ and subsidies to _____________ exports and thereby aid domestic businesses
incentives stimulate
A U.S. company may establish a specialized marketing organization in a foreign country by appointing a foreign agent or a foreign distributor and this is called __________________ exporting
indirect
The US government decide to charge $10.25 on every Bluray player that is imported. This policy
is a legally permitted tariff
When a U.S. firm wishes to limit its involvement in an international market, it may establish a(n) ___________________ relationship with a foreign firm
limited
A distribution agreement sets out the terms and conditions of the distributorship, such as price, currency of payment, and __________________ of payment
method
When a US firm establishes a wholly owned subsidiary in a foreign country, the parent company usually
remains in the US
the international organization charged with the responsibility for eliminating trade barriers including tariffs is
the WTO
Dumping
the selling of goods in a foreign country at a price below the price charged for the same goods in the domestic market
Export
to sell products to buyers located in other countries
A US firm can expand into international markets through a joint venture
true
Foreign companies, such as Sony and Nissan, have established US plants to avoid import duties that are imposed on Japanese products entering this country
true