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