MGNT Ch. 8

quota

a limit on the number or volume of imported products

expatriate

someone who lives and works outside his or her native country

5 types of nontariff barriers

1. quotas 2. voluntary export restraints 3. government import standards 4. government subsidies 5. customs valuation/classification

Uruguay round of GATT

1. tariffs were cut 40% on average world wide by 2005 2. tariffs were eliminated in ten specific industries: beer, alcohol, construction equipment, farm machinery, furniture, medical equipment, paper, pharmaceuticals, steel, and toys. 3. stricter limits were put on government subsidies 4. established protections for intellecutual property, such as trademarks, patents, and copyrights

customs classification

a classification assigned to imported products by government officials that affects the size of the tariff and the imposition of import quotas

franchse

a collection of networked firms in which the manufacturer or marketer of a product or service, the franchisor, licenses the entire business to another person or organization, the franchisee

multinational corporation

a corporation that owns businesses in two or more countiries

tariff

a direct tax on imported goods

protectionism

a government's use of trade barriers to sheild domestic companies and their workers from foreign competitions

direct foreign investment

a method of investment in which a company builds a new business or buys an existing business in a foreign country

Union of South American Nations (UNASUR)

a regional trade agreement among Argentina, Brazil, Paraguay, Uruguay, Venezuela, Bolivia, Colombia, Ecuador, Peru, Guyana, Suriname, and Chile

Asia-Pacific Economic Cooperation (APEC)

a regional trade agreement among Australia, Canada, Chile, the People's Republic of China, Hong Kong, Japan, Mexico, New Zealand, Papua New Guinea Peru, Russia, South Korea, Taiwan, the United States, and all the members of ASEAN except Cambodia, Lao PDR, and Mynamar

Association of Southeast Asian Nations (ASEAN)

a regional trade agreement among Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam

Dominican Republic-Central America Free Trade Agreement (CAFTA-DR)

a regional trade agreement among Costa Rica, the Doinican Republic, El Salvador, Guatemala, Honduras, Nicarague, and the United States

Maastrict Treaty of Europe

a regional trade agreement among most European countries

North American Free Trade Agreement (NAFTA)

a regional trade agreement among the United States, Canada, and Mexico

Government import standard

a standard ostensibly established to protect the health ad safety of citizens but, in reality, is often used to restrict imports

joint venture

a strategic alliance in which two existing companies collaborate to forma third, independent company

General Agreement on Tariffs and Trade (GATT)

a world wide trade agreement that reduced and eliminated tariffs, limited government subsidies, and established protections for intellectual property

licensing

an agreement in which a domestic company, the licencor, receives royalty payments for allowing another company, the license to produce the licencor's product, sell its service, or sue its brand name in a specified foreign market

cooperative contract

an agreement in which a foreign business owner pays a company a fee for the right to conduct that business in his or her country

strategic alliance

an agreement in which companies combine key resources, costs, risks, technology, and people

regional trading zones

areas in which tariff and nontariff barriers on trade between countries are reduced or eliminated

wholly owned affiliates

foreign offices, facilities, and manufacturing plants that are 100 percent owned by the parent company

subsideies

government loans, grants, and tax deferments given to domestic companies to protect them from foreign competition

Trade barrier

government-imposed regulations that increase the cost and restrict the number of imported goods

local adaptation

modifying rules, guidelines, policies, and procedures to adapt to differences in foreign customers, governments, and regulatory agencies

global new ventures

new companies that are founded with an active global strategy and have sales, employees, and financing in different countries

nontariff barriers

nontax methods of increasing the cost or reducing the volume of imported goods

exporting

selling domestically produced products to customers in foreign countries

global business

the buying and selling of goods and services by people from different countries

purchasing power

the relative cost of a standard set of goods and services in different countries

policy uncertainty

the risk associated with changes in laws and government policies that directly affect the way foreign companies conduct business

political uncertainty

the risk of major changes in political regimes that can result form war, revolution, death of political leaders, social unrest, or other influential events

national culture

the set of shared values and beliefs that affects the perceptions, decisions, and behavior of the people from a particular country

World Trade Organization (WTO)

the successor to GATT; the only international organization dealing with the global rules of trade between nations; its main function is to ensure that trade flows as smoothly, predictably, and freely as possible

voluntary export retraints

voluntarily imposed limits on the number or volume of products exported to a particular country *they are illegal

Global consitency

when a multinational company has offices, manufacturing plants, and distribution facilities in different countries and runs them all using the same rules, guidelines, policies, and procedures