Chapter 5

Buyer for Export

An intermediary in the global market that assumes all ownership risks and sells globally for its own account

Export Agent

An intermediary who acts like a manufacturer's agent for the exporter; the export agent lives in the foreign market.

Export Broker

An intermediary who plays the traditional broker's role by bringing buyer and seller together.

World Bank

An international bank that offers low-interest loans, advice, and information to developing nations.

International Monetary Fund (IMF)

An international organization that acts as a lender of last resort, providing loans to troubled nations, and also works to promote trade through financial cooperation.

Capital Intensive

Using more capital than labor in the production process.

Joint Venture

When a domestic firm buys part of a foreign company or join with a foreign company to create a new entity.

Multidomestic Strategy

When multinational firms enable individual subsidiaries to compete independently in domestic markets.

Countertrade

form of trade in which all or part of the payment for goods or services is in the form of other goods or services.

Multinational Corporation

A company that is heavily engaged in international trade, beyond exporting and importing.

Group of Twenty (G-20)

A forum for international economic development that promotes discussion between industrial and emerging-market countries on key issues related to global economic stability.

European Union (EU)

A free trade zone encompassing 28 European countries.

Blog

A publicly accessible Web page that functions as an interactive journal, where readers can post comments on the author's entries.

Floating Exchange Rate

A system in which prices of different currency move up and down based on the demand for and supply of each currency.

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

A trade agreement instituted in 2005 that includes Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States.

General Agreement on Tariffs and Trade (GATT)

A trade agreement that contained loopholes enabling countries to avoid trade-barrier reduction agreements.

Uruguay Round

A trade agreement that has dramatically lowered trade barriers worldwide; created the World Trade Organization.

World Trade Organization (WTO)

A trade organization that replaced the old General Agreement on Tariffs and Trade (GATT)

Direct Foreign Investment

Active ownership of a foreign company or of overseas manufacturing or marketing facilities.

North American Free Trade Agreement (NAFTA)

An agreement between Canada, the Untied States, and Mexico that created the world's then-largest free trade zone.

Global Marketing

Marketing that targets markets throughout the world.

Contract Manufacturing

Private label manufacturing by a foreign company.

Global Marketing Standardization

Production of uniform products that can be sold the same way all over the world.

Global Vision

Recognizing and reacting to international marketing opportunities, using effective global marketing strategies, and being aware of threats from foreign competitors in all markets.

Exporting

Selling domestically produced products to buyers in other countries.

Job Outsourcing

Sending U.S. jobs abroad.

Mercosur

The largest Latin American trade agreement; includes Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, and Venezuela.

Licensing

The legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge.

Exchange Rate

The price of one country's currency in terms of another country's currency.

Dumping

The sale of an export product at a price lower than that charged for the same or a like product in the "home" market of the exporter.

Gross Domestic Product (GDP)

The total market value of all final goods and services produced in a country for a given time period.