INTB 3355 FINAL
Internal Economic Analyses: Management requires economic data and ______ data
socioeconomic
ISO & IEC is an example of...
standardization of measurement, materials and equipment, and other technology fields
Income redistribution proceeds very slowly, so older data are ____ _____.
still useful
global interest in arbitration is growing. What are some reasons arbitration is preferred over litigation?
suspicion of foreign courts, faster, confidential, less expensive
Example of the US enforcing laws abroad not by force but through traditional legal means
the US government imposes taxes on US citizens and US permanent residents regardless of either the source of income or the residence of the taxpayer
Confiscation
the action of taking or seizing someone's property with authority
Define: discretionary income
the amount of income left after paying taxes and making essential purchases
Discretionary income
the amount of income left after paying taxes and making essential purchases
What is the best known organization that administers international arbitrations?
the international court of arbitration of the international chamber of commerce in paris
Extraterritoriality
the lack of clarity about foreign countries overlapping laws
Define: Underground economy
the part of a nations's income that, because of un-reporting or underreporting, is not measured by official statistics
Political Risk
the risk an investment's returns could suffer because of poltical changes or instability in a country.
Define: Gross National Income (GNI)
the total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad
Privatization
the transfer of public sector assets to the private sector
Name 3 complains privately owned companies have of government-owned companies
they dont have to make a profit; government contracts; export assistance
If a country with a moderate risk of kidnapping presented a great opportunity for investment, what would you do?
train your employees on security measures
Nationalization
transfer of property from private to public ownership on a large scale with/without compensation
What are the two sources of law?
treaties and customary international law
Nationalization and privatization are opposing _____.
trends
(True/False) Chevron needs to compensate indigenous people for contamination clean up, potable water system, public health system, and community restoration in Ecuador.
true
(true/false) Immigration has a positive impact on employers, managers, workers with complementary skills, the federal government; and a negative impact on states with generous social services
true
(true/false) income is generally more evenly distributed in richer nations
true
(true/false) litigation settled in court; arbitration settled in private
true
(true/false) sources of conflict and violence are citizens protesting their government, territorial disputes, disputes based on ethic, or racial or religious divisions.
true
Low-income economies: GNI per capita less than $_____
1,045
Middle-income economies: GNI per capita between $______ and $12,746
1,045
High-income economies: GNI per capita of $_______ or more
12,746
Chevron/Texaco operating in Ecuador for about 30 years for oil exploration; dumped ___ billion gallons of toxic waste and contaminated 1500 square miles of land
16
What year did Germany, France, Italy, Belgium, Netherlands and Luxembourg all join the European Union?
1952
What year did Denmark, Ireland and UK join the European Union?
1973
What year did Greece join the European Union?
1981
What year did Spain and Portugal join the European Union?
1986
What year did East Germany join the European Union?
1990
What year did Austria, Finland and Sweden join the European Union?
1995
What year did Czech Republic, Cyprus, Estonia, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia join the European Union
2004
What year did Bulgaria and Romania join the European Union?
2007
What year did Croatia join the European Union?
2013
Ecuador sues Chevron for the dumping and demands compensation for the wrongs committed against them; ___ individuals representing 30,000 victims' files suit in US against Chevron.
47
After NAFTA, Trade between the three parties currently accounts for about __% of Canadian and Mexican trade and more than a third of US trade
80
After NAFTA, ______ trade in both directions between Mexico and the US increased from $7.3 billion in 1994 to $20.1 billion in 2006
Agricultural
Name 3 countries in the emerging market stage
Brazil, Russia and Mexico
Questionable or dubious payments paid to government officials by companies looking to purchase contracts from those governments
Bribes
The member countries of NAFTA are:
Canada, Mexico, and the US
What came before the NAFTA?
Canada-US Free Trade Agreement
What happened after the Chevron verdict?
Chevron lied to US courts and still hasn't paid and denies responsibility for misconduct
A contract clause to establish where disputes will be settled
Choice of Forum Clause
The European Commission oversees the implementation of the legislation, taking non-compliers to the ____.
Court of Justice
International rules derived from customs and use over centuries
Customary International Law
What makes the Ecuador vs. Chevron case a good illustration of extraterritoriality?
Ecuador is trying to apply their ruling to a US company that no longer does business in their country
Current NAFTA Concerns for Canada:
Energy trade policies
Import restrictions, local participation requirements, local content restrictions, government-owned competition
Entry Barriers
Process of using a market factor that is successful in one market to estimate demand in a similar market
Estimation by Analogy
Council, European Parliament or another party places request for legislation to the _________.
European Commission
Hierarchy of the European Union:
European Council>European Parliament>Council of Ministers>European Commission>Court of Justice>Court of Auditors>Economic and Social Committee>Committee of the Regions>European Investment Bank>Agencies>European Central Bank
The Commission drafts the legislation and presents it to the _____ and _____.
European Parliament and Council of Ministers
Government seizure of the assets of a handful of companies with compensation is known as
Expropriation
A country's attempt to apply its laws to foreigners or nonresidents and to acts and activities that take place outside of its borders
Extraterritoriality
Only in communist countries do governments own the factors of production
False
(true/false) The Economic Screen should be conducted before the basic needs screen.
False. Basic needs is first
Environmental scanning is a sub-type of market screening
False. Market screening is the sub-type
U.S. law banning payments to foreign government officials for special treatment
Foreign Corrupt Practices Act
Most international organizations prefer GNI to GDP for measuring the value produced in an economy because...
GDP only measures the market value of goods and services produced in a nation in a particular year
Which presidential candidate won the popular vote?
Hillary Clinton
_______ has more than tripled since NAFTA's inception
Intra-North American trade
When did NAFTA launch?
January 1, 1994
When was the implementation of NAFTA completed?
January 1, 2008
Laws stimulating the specified amount of a good or service be supplied by producers in the domestic market
Local content requirements
What is "Data that correlate highly with market demand for a product"?
Market Factors
Economic data used to measure relative market strengths of countries or geographic areas
Market Indicators
Alternative explanations to pre-NAFTA
Mexican economic crisis, losing manufacturing jobs to China, World economic crisis
In NAFTA, _____ protected from financial instability in South America
Mexico
The NAFTA Increased export manufacturing in _____.
Mexico
The transfer of private assets to the public sector with or without compensation.
Nationalization
What are the different types of property seizure
Nationalization, Confiscation and Expropriation
What does NAFTA stand for?
North American Free Trade Agreement
Nationalization and privatization are
Opposing Trends
What 3 places are centers of arbitration?
Paris, London and NY
Political climate, government stability, public unrest
Policy Stability
When public assets are sold to a private owner
Privatization
Restrictions on the repatriation of earnings, limits to F.D.I, inability to provide foreign exchange
Profit Remittance Barriers
How should the US react to the loss of manufacturing jobs?
Provide additional incentives for companies to reverse offshoring practices.
NAFTA Stipulations
Removal of most tariffs and restrictions on trade between the US, Canada, and Mexico. Wide range of agreements on agricultural, textile and automotive trade. Agreements on telecommunications and intellectual property. Mobility of workers. Environmental policies.
Example of privatization
Thailand has private companies operating some of the passenger trains of its state-owned railroad
Define: Rule of Law
The basis of a country's legal system, protects investment
Data on imports may not completely measure market potential because
Transportation costs impact prices
Agreements between countries - also called conventions, covenants, compacts, protocols
Treaties
Successive observations of a variable at regular intervals analyzed to establish regular patterns that are used for establishing future values
Trend Analysis
Immigration has a positive impact on employers, managers, workers with complementary skills, the federal government; and a negative impact on states with generous social services
True
What is CISG?
UN convention of international sale of goods
Legal Performance Contracts Possible Solutions
UN convention on international sale of goods. private solutions are arbitration, an alternative to litigation. incoterms, the international chamber of commerce's universal trade terminology
Currently, Mexico's main concerns regarding NAFTA are related to:
US migration policies and high corn subsidies for US farmers
Which of the following was NOT among the 6 founding members of the European Union? Germany Italy Belgium United Kingdom
United Kingdom
Based on the information you have, do you believe Chevron should pay a compensatory fine?
Yes, as ruled by the Ecuadorian courts
Define: developed economies
a classification for high-income industrialized nations, which have high living standards and the most technically developed infrastructure
Define: developing economies
a classification for the world's lower-income nations, which have less technically developed infrastructures and lower living standard
Define: Extraterritoriality
a country's attempt to apply its laws to foreigners or nonresidents and to acts and activities that take place outside its borders
Define: Extraterritorial Application of Laws
a country's attempt to apply its laws to foreigners or nonresidents and to acts and activities that take place outside of its borders
Define: Arbitration
a dispute resolution mechanism that is an alternative to litigation
Define: Purchasing Power Parity (PPP)
a means of adjusting the exchange rates for two currencies so the currencies have equivalent purchasing power
PPP
a means of adjusting the exchange rates for two currencies so the currencies have equivalent purchasing power. Use when you are trying to compare and rank economies so we don't end up comparing apples and oranges.
Define: Gross Domestic Product (GDP)
a measure of an economy's size based on the market value of goods and services produced within a nation in a year
Define: income distribution
a measure of how a nation's income is apportioned among its people
Define: Gini index
a measure of the degree to which family income within a country is distributed equally
Define: Disposable Income
after-tax personal income
Define: Treaties
agreements between countries - also called conventions, covenants, compacts, protocols
The ____ _____ _____ allows non-US nationals to file lawsuits in US courts for alleged violations of international law.
alien tort statute
International Economic Analysis
all firms must conduct economic analysis and should provide economic data on both actual and prospective markets
List the possible solutions of international dispute settlement
un convention on international sale of goods; arbitration-an alternative to litigation; incoterms, the international chamber of commerce's universal trade terminology
Underground economy includes...
undeclared production of legal and illegal goods and services
Higher income tax levels and increased government red tape tend to create a bigger _______ _______.
underground economy
UNCITRAL is an example of...
uniform accounting and bankruptcy standards
UN-CSIG is an example of...
uniformity in international sales agreements
Country with largest GNI based on PPP
united states
What does the Foreign Corrupt Practices Act (FCPA) do?
us law banning payments to foreign government officials for special treatment
Define: Foreign Corrupt Practices Act (FCPA)
us laws banning payments to foreign government officials for special treatment
Facilitating grease payments for routine government actions such as...
visa issuance, import approvals, and the processing of government papers
One of the major problems usually involved in cross-border litigation is the question of...
which jurisdiction's law should apply and where the litigation should occur
International Litigation Major Problems
which jurisdiction's laws should apply? where will litigation occur?
What is an example of international arbitration?
world bank
Should Turkey become a member of the European Union?
yes
Will the European Union survive in the future?
yes
Define: Foreign Impact
all the uncontrollable forces originating outside the home country that surround and influence the firm
Define: Foreign environment
all the uncontrollable forces originating outside the home country that surround and influence the firm
The European Union in the 21st century:
ambitious process of constitutionalization; different from other regional organizations (NAFTA) that only focus on economic matters
Who should make a binding decision in the Ecuador vs. Chevron case?
an international court should be created that could make binding decisions
private solution to performance of contracts
arbitration
The purpose of economic analyses is to...
assess the overall outlook for the economy and the impact of economic changes on the firm
Country with largest GNI based on exchange rates
australia
International law comes from several sources, the most important of which are _____ and ______ treaties between nations
bilateral and multilateral
A contract clause establishing where a dispute will be settled is known as
choice-of-forum clause
International Litigation Solutions
choice-of-law clause where law governs and choice-of-forum clause where disputes will be settled
WW2 provided impetus for change in European relations such as:
collective security and economic political integration
Determinants of political risk in a country/region include the circumstances of:
conflict and violence; terrorism and kidnapping; property seizure; policy changes; local content requirements
Chevron destroys company documents showing _____.
contaminations
NAFTA lead to Increased _________ investment between the three countries
foreign direct
In the 1990s, there was a boost in efforts to establish _______ and ______ in Asia and in North and South America.
free trade areas and customs unions
Legal Performance Contracts Major Problems
getting other side to perform obligations. no worldwide court has power to enforce decrees. UN International Court of Justice relies on voluntary compliance. International contracts are complicated to enforce.
List the major problems of international dispute settlement
getting other side to perform obligations; no worldwide court has power to enforce decrees; international court of justice relies on voluntary compliance; international contracts are complicated to enforce
Foreign Corrupt Practices Act (FCPA) uncertainties
grease not outlawed; no clear distinction between legal grease and illegal bribes;
Ecuadorian court rules _____ for Chevron.
guilty
Income inequality ______ in early stages of development and _____ in later stages.
increases reverses
Income Distribution
indicates how a nation's income is apportioned among its people
Define: International Impact
interaction between domestic and foreign environmental forces or between sets of foreign environmental forces
Define: International environment
interaction between domestic and foreign environmental forces or between sets of foreign environmental forces
_______ ______ flows better with standardized laws
international business
Define: Customary International Law
international rules derived from customs and used over centuries
Why is arbitration preferred?
it's usually quicker, less expensive, and more private than litigation, and it's usually binding on all parties. It's a process, agreed to by parties to a dispute in lieu of going to court, by which a neutral person or body makes a binding decision
Country with smallest GNI based on exchange rates
kenya
country with smallest GNI based on PPP
kenya
The U.S., EU and other countries attempt to enforce their _____ outside their borders
laws
The European Parliament and Council of Ministers vote on the _____.
legislation
International Dispute Settlement
litigation performance of contracts united nations solutions private solutions - arbitration
Current NAFTA Concerns for US:
losing manufacturing jobs to Mexico
The NAFTA led to a reduction in _______ jobs in the US
manufacturing
Low income distribution score =
more equal distribution
What policy should the US pursue relative to NAFTA?
more integration
It is more complex to do international economic analysis because of...
multiple economies and their interactions and divergent values
What is an example of Foreign Corrupt Practices Act (FCPA) uncertainties?
no clear distinction between legal grease and illegal bribes
Where litigation in international disputes should occur is
often complex, so contracts should choose choice-of-law clause and choice-of-forum clause
whenever businesses enter into agreements with other businesses, the possibility exists that there may be problems getting the other side to...
perform its obligations
Chevron has opportunity to litigate in US, but...
pleas to move to Ecuador and promises US court to follow court decision
A type of risk faced by investors or corporations as a result of political changes or instability in a country
political Risk
UN has sponsored many conferences that have led to multinational agreements on a range of matters, including:
postal delivery and use of driver's licenses in other countries
multilateral negotiations and global economic competition provide ...
powerful incentives
What was the main goal of NAFTA?
promote economic growth by easing the movement of goods and services between the US, Mexico and Canada
Income is generally more evenly distributed in ______ nations
richer
The main motivation behind the creation of the European Union was:
security concerns
Economic analyses for multinationals are more complex than those for a purely domestic firm because there are many _______ to consider instead of just one, there are interactions between them, and values are highly divergent.
economies
Define: emerging market economies
economies with per capita incomes in the low to middle range that are in a transition toward developed status
Many countries, including the US and members of the European Union, often attempt to ______ their laws outside of its borders
enforce
Extraterritorial application of laws has been extended in many other areas including antitrust and _______ laws.
environmental
what is grease?
facilitating payments made solely to expedite nondiscretionary official actions
(True/False) Democrats won a majority in the US Senate
false
(True/False) Only in communist countries do governments own the factors of production
false
(true/false) developed countries tend to have low savings rates
false
