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Unit 2 Chapter 4. International Trade. Global Marketplace. Exists because countries need to trade with one another. Continues to expand Because of the reduction in trade restrictions Makes people all around the world potential customers and employees. International trade. - PowerPoint PPT Presentation
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Unit 2Chapter 4
International Trade
Global Marketplace Exists because countries need to
trade with one another. Continues to expand
• Because of the reduction in trade restrictions
Makes people all around the world potential customers and employees
International trade The exchange of goods and services
among nations. Imports – Goods and services
purchased from other countries Exports – Goods and services sold to
other countries
Benefits of International Trade Consumers
• Competition of the foreign companies• Encourages high quality, lower prices.
Producers• Expand business by working with other
countries• 1/3 of profits of US businesses come from
international trade
Benefits - Continued Workers
• Leads to higher employment rates Example – Toyota (a Japanese company) has
generated 50,000+ jobs in the United States
Nations• Improves the standard of living for that
countries people• Individuals have more options when making
purchasing decisions.
Balance of Trade The difference in value between
exports and imports of a nation Surplus – when a nation exports more
than imports Trade Deficit – when a nation imports
more than it exports
Trade Barriers Tariff - A tax on imports
• Also called a duty Embargo
• A total ban on specific goods coming into and leaving a country
• A lot of times for health reasons
Trade Agreements World Trade Organization (WTO)
• A coalition of nations that makes rules governing international trade.
NAFTA – North American Free Trade Agreement• International trade agreement between US,
Canada, and Mexico European Union
4.2 The Global Marketplace
Licensing• Letting another company use a trademark,
patent, formula, company name, for a fee or royalty
Contract Manufacturing• Hiring a foreign manufacturer to make
products Joint Venture
• A business enterprise that companies set up together
Globalization Selling the same product and using
the same promotion methods in all countries.
Adaptation Adaptation – a company’s use of an
existing product and/or promotion to which changes are made to better suit the characteristics of a country or region
Assignment Page 91
• # 7, 9, 10 Page 92
• #16