...economies toward an interdependent, integrated global economic system. Globalization refers to the shift toward a more integrated and interdependent world economy. Globalization has two facets: 1) the globalization of markets 2) the globalization of production 1) The Globalization Of Markets: The globalization of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace. Ex: In many industries, it is no longer meaningful to talk about the “German market” or the “American market”. Instead, there is only the global market. Falling trade barriers make it easier to sell internationally. The tastes and preferences of consumers are converging on some global norm. Firms help create the global market by offering the same basic products worldwide. 2) The Globalization Of Production: The globalization of production refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production like land, labor, and capital Companies compete more effectively by lowering their overall cost structure or improving the quality or functionality of their product offering. The Emergence Of Global Institutions : Institutions are needed to: * help manage, regulate, and police the global marketplace * promote the establishment of multinational treaties to govern the global business system Institutions created over the...
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...Tariff and Nontariff Barriers to Trade Scott Jaeger MGT/448 November 16,2015 Lara Dickerson Tariff and Nontariff Barriers to Trade Since the beginning of trade between countries or regions, there have been barriers that have deterred, or prevented the trade of goods between countries or regions. These barriers are put into two different categories. First, there are tariff barriers, these include taxes and quotas put on imports by the country receiving the goods. The other barriers to trade are the nontariff barriers. These barriers include such things as bans on imports, import licenses, and “buy national” policies, along with a slew of other deterrents to trade. In this paper, the differences between these two barriers will be discussed, along with how these barriers are used in global finance, and their importance in managing risk. Tariffs and Quota’s Tariffs To put it the simplest terms possible, tariffs are taxes imposed by a country in order to raise the price of imported goods and services. There are a couple of different reasons that a country may use tariffs, depending on the countries that they are trading with, and the goods or services involved in the trade, but essentially, “The idea is to increase demand for domestic products while reducing the volume of imports.” (Sanders, 2015). Countries may want to promote the domestic products or services in the same trade, or they may also simply want to make money. While tariffs can certainly benefit the...
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...ECFI 644 International Economics Instructor: Dosse Toulaboe By Zhenjie Song (Leo) The Impact of Tariff and Non-Tariff Barriers International Trade Introduction In nowadays, tariff and non-tariff barriers have affected the trends and structure of international trade, the geographic direction, and importing and exporting countries relations (Stigler, 1971). This research paper mainly will talk about the tariff, non-tariff, and the relationship and impact of them. Tariff A tariff is simply a tax or duty placed on an imported good by a domestic government. Tariffs are usually levied as a percentage of the declared value of the good, similar to a sales tax. Unlike a sales tax, tariff rates are often different for every good and tariffs do not apply to domestically produced goods. Tariff could be an old and popular method of obtaining revenue from international business and economic activities. Generally, government levy tariffs for three main reasons. The first is that the tariff can protect fledgling domestic industries from foreign competition; the second is that the tariff can protect aging and inefficient domestic industries from foreign competition; the last reason is that the tariff can protect domestic producers from dumping by foreign companies or governments. Dumping occurs when a foreign company charges a price in the domestic market which is "too low". In most instances "too low" is generally understood to be a price which is lower in a foreign market than the price...
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...integrated global economic system 1-2 What Is The Globalization of Markets? Historically distinct and separate national markets are merging It no longer makes sense to talk about the “German market” or the “American market” Instead, there is the “global market” falling trade barriers make it easier to sell globally consumers’ tastes and preferences are converging on some global norm firms promote the trend by offering the same basic products worldwide 1-3 What Is The Globalization of Markets? Firms of all sizes benefit and contribute to the globalization of markets 97% of all U.S. exporters have less than 500 employees 98% of all small and mid-sized German companies participate in international markets 1-4 What Is The Globalization of Production? Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, energy, and capital Companies can lower their overall cost structure improve the quality or functionality of their product offering 1-5 Why Do We Need Global Institutions? Global institutions help manage, regulate, and police the global marketplace promote the establishment of multinational treaties to govern the global business system 1-6 Why Do We Need Global Institutions? Examples include the General Agreement on Tariffs and Trade (GATT) the World Trade Organization...
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...Chapter 15 GLOBAL OPPORTUNITIES Instructor ANAND TULADHAR Scribe NEHA KAYATSHA GEETA KHADKA 10th July, 2015 1. Explain why “going global” has become an integral part of many small companies’ marketing strategies. Companies that move into international business can reap many benefits, including offsetting sales declines in the domestic market; increasing sales and profits; extending their products’ life cycles; lowering manufacturing costs; improving competitive position; raising quality levels; and becoming more customer oriented. 2. Describe the principal strategies for going global. Perhaps the simplest and least expensive way for a small business to begin conducting business globally is to establish a site on the World Wide Web. Companies wanting to sell goods on the Web should establish a secure ordering and payment system for online customers. Trade intermediaries such as export management companies, export trading companies, manufacturer’s export agents, export merchants, resident buying offices, and foreign distributors can serve as a small company’s “export department.” In a domestic joint venture, two or more U.S. small companies form an alliance for the purpose of exporting their goods and services abroad. In a foreign joint venture, a domestic small business forms an alliance with a company in the target area. Some small businesses enter foreign markets by licensing businesses in other nations to use their patents...
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...interdependent, integrated global economic system * Globalization refers to the shift toward a more integrated and interdependent world economy What Is The Globalization of Markets? * Historically distinct and separate national markets are merging * It no longer makes sense to talk about the “German market” or the “American market” * Instead, there is the “global market” * falling trade barriers make it easier to sell globally * consumers’ tastes and preferences are converging on some global norm * firms promote the trend by offering the same basic products worldwide What Is The Globalization of Production? * Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, and capital * Companies can * lower their overall cost structure * improve the quality or functionality of their product offering * Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, and capital * Companies can * lower their overall cost structure * improve the quality or functionality of their product offering Why Do We Need Global Institutions? * Institutions * help manage, regulate, and police the global marketplace * promote the establishment of multinational treaties to govern the global business system * Examples...
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...Globalisation 1 Lecture/Chapter Topics • Chapter Introduction • Definition of Globalisation • Emergence of Global Institutions • Driving Forces of Globalisation • Changing Characteristics of Global Economy • Globalisation Debate • Managing in Global Marketplace Definition of Globalisation • • Globalisation: the trend towards a more integrated global economic system Effects of globalisation can be seen everywhere, for example: – – – – the cars people drive the food people eat the jobs people have the clothes people wear Definition of Globalisation • What is Globalisation? – Globalisation refers to the shift towards a more integrated and interdependent world economy. • Facets of Globalisation – Globalisation of Markets – Globalisation of Products – Emergence of Global Institutions Definition of Globalisation • The Globalisation of Markets – – The historically distinct and separate national markets are merging into one huge global marketplace in which the tastes and preferences of consumers in different nations are beginning to converge in some global norm. Examples of consumer products: Prada fashions, Sony Playstation video games, McDonald’s hamburgers (US), Nescafe coffee (Switzerland), Nokia mobile phones (Finland), IKEA furniture (Sweden) Definition of Globalisation • Globalisation of Production – Sourcing goods and services from different locations around the globe in an attempt to take advantage...
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...Introduction to the Global Economy The Global Economy Globalisation – Refers to the integration between different countries and economies and the increased impact of international influences on all aspects of life and economic activity * No longer are economies dominated by local influences but rather through global influences from another countries and economies due to the impact of globalisation. * The aggregate value of all goods and services produced worldwide each year in the global economy is known as gross world economy * The Great depression in the 1930’s and the world wars are examples of international influences on economies in the twentieth century. This also caused trade barriers to arise * The major indicators of integration between economies include: * International trade in goods and services * International trade flows * International investment flows and transnational corporations * Technology, transport and communication * The movement of workers between countries Globalisation * Barriers have been put up to try and protect businesses * Benefits to removing barriers * Barriers have been removed but there are still some barriers that exist * Some say the EU is closing off itself to other countries * Benefits to globalisation: * Trading – we might not have products that are only overseas * Cheaper labour is overseas * Investment overseas and investment into Australia * Financial flows of...
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...FACILITATING GLOBALIZATION In recent times, many factors play a facilitating role to promote and foster international trade. Many developing countries adopted protectionist policies and raised huge tariff barriers for decades to protect their vulnerable home industries from foreign goods. Global business opportunities were also limited by poor communication facilities, slow development of infrastructure, inordinate delays in travel and shipping and a host of non-tariff trade barriers raised by many countries. Today, people can reach any place on the globe in one day and international communication is instantaneous. ‘Business operations can be managed effectively simultaneously’. Increasingly, global corporations set up production units in developing countries having better factor endowments and plentiful human resources with a view to exploiting them for their benefit and profit.1 At the beginning of the 21st century, nations are more closely linked to one another than ever before through trade in goods and services, flows of capital, movement of labour—though to a limited extent—and through investments in each other’s economies. There are several factors that have played a key role in promoting international trade. These are as follows: Falling trade barriers: Liberalization of trade has been recently accelerated as a result of free trade agreements, emergence of trade blocs and the facilitating roles played by international organizations such as the WTO, International Monetary...
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...Helms-Burton dispute to the WTO. The EU took the Helms-Burton dispute to the WTO because they felt that it violated international rules dealing with trade. The EU had a dispute with the U.S. regarding testing agriculture, trade and investments and biotechnology issues which were brought to the attention of the WTO found the following: The EU, concerned about the effect of the North American Free Trade Agreement (NAFTA), proposed a Transatlantic Free Trade Agreement (TAFTA) in 1994, and the U.S.-somewhat reluctantly-went along. There was to be no TAFTA to complement NAFTA, however: only a renewed political gesture in the form of the 1995 New Transatlantic Agenda (NTA) ("EU/US Summit,”). Its main lasting effect was the Transatlantic Business Dialogue (TABD), the first transatlantic lobby, which brought about agreements on testing and certification as a step toward defining a new trade agenda. It also envisioned the creation of a New Transatlantic Marketplace (NTM) within which trade barriers between the U.S. and EU would be largely dismantled.(Padgett,2009) Continuously diluted, in 1998 the NTM became today's Transatlantic Economic Partnership (TEP), a limited agreement slighting key issues, particularly agriculture, audiovisual services, and culture. This failure to develop substantive transatlantic regulations means reliance on the World Trade Organization's (WTO) dispute settlement process for airing differences. As the cold war settled down in 1990, the U.S. rebuffed EU calls for...
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...Global Business Final Exam Notes DRIVERS AND METHODS Lecture 1: Introduction *Globalisation: shift towards a more integrated and interdependent world economy. International Business: Any business that has productive activities in two or more countries (multinational enterprise - MNE). *Globalisation of markets: Merging of historically distinct and separate national markets into a global marketplace in which the tastes and preferences of consumers in different nations are beginning to converge. However, significant differences in culture, politics and economies exist between countries and adaption of products and strategies to local conditions is often necessary for international business to succeed. *Globalisation of production: Sourcing goods and services from locations around the globe in an attempt to take advantage of national differences in the cost and quality of factors of production (labour, energy, land and capital), thereby allowing them to compete more effectively against their rivals Example: Boeing aircrafts use companies s for all over the world for different components (e.g UK, France, Canada, Sweden) Firms are better able to respond to international customer demand due to improvements in transportation technology e.g jet transport; temperature controlled containerized shipping and co-ordinated ship-rail truck systems *Globalisation of institutions: Institutions are needed to help manage, regulate and police the global marketplace and promote the...
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...* Tariff and Non-Tariff Barriers * Tariff and Non-Tariff Barriers * Until the mid-21st century most nations could put restrictions on imports from other * countries thus eliminating competition of certain goods within the importing nation. This is * called a tariff. The World Trade Organization (WTO) declared that tariffs represented a * violation of the WTO treaty and were to no longer be used by members of the WTO, but this * created non-tariff barriers. The following will describe tariffs and non-tariff barriers to trade, * why would a country impose any form of tariff, and examples of each. Both tariffs and non-tariff * barriers to trade have an effect global financing operations and managing risk. * Tariffs According to Hill (2009), “a tariff is a tax levied on imports.” A tariff is Japan placing a tax on steel; for every pound of steel imported into Japan the nation exporting the steel would have to pay this tax. The problem with tariffs is it restricts free trade. Because of this restriction of trade lead to the creation of General Agreement on Tariffs and Trade and its successor, the WTO. WTO promotes free trade by limiting the ability of national governments to adopt policies that restrict imports into their nations. Some nations believed a tariff was in the best interest of his or her nation. * A tariff does some positive things for a nation imposing the tariff. A tariff would eliminate competition of a certain...
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...------------------------------------------------- The Global Financial Crisis and Protectionism QUESTION 1: Why do you think calls for protectionism are greater during sharp economic contractions than during boom periods? * Protection of their own economic industries and to curb job losses * Interdependent economy to lessen the impact of economic loss on food, fuel and property prices * To protect job losses at national producers and possible bankruptcy * Developing countries were concerned about safety rules and environmental concerns. * In an emerging economy, a barrier to trade and blocking of imported goods due to safety and environmental reasons could spark entrepreneurs to grow the local economy with local jobs and local suppliers Protectionism = “Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. Typical methods of protectionism are import tariffs, quotas, subsidies or tax cuts to local businesses and direct state intervention.” (http://www.investopedia.com/terms/p/protectionism.asp) QUESTION 2: Despite the sharp economic contraction during 2008-2009, the increase in protectionist measures was fairly modest. Why do you think this was the case? * After the 1930 economic slump, some of the trade constraints did more harm than good. * The WTO instituted protectionist measures to protect countries and provide a more stable...
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...Module: Issues in Global Business and Strategic Concepts Assignment on: Globalization Prepared for: Md. Ashiqur Rahman Bhuiyan Programme Leader BACB & Personal Tutor Prepared by: Tahmidul Islam University of Derby Program: Bachelor (Hons.) Business Administration Submitted date: 11/6/2013 Globalization: According to “Charles Willium Hill” globalization is toward a more integrated and interdependent world economy Globalization makes the world short and easy to communication. Bangladesh is famous for exporting RMG respectively. Through globalization Bangladesh is earning a lot foreign remittance in RMG sector. RMG Bangladesh: In 1978, Bangladesh starting earning through RMG and in that year Bangladesh RMG sector earn only one million dollar. However now in 2012 RMG sector of Bangladesh yearly turnover is 4.2 million dollar. The sector contributes significantly to the GDP. Our labor is cheap for a reason we can earn through RMG sector, our lion percent of people work in garments sector. It is possible because of globalization impact. The Globalization of Readymade Garments Bangladesh: As we all know, globalization means in a sentence ‘cross border business.’ Reduce all trade barriers around global. Bangladesh is also under globalization. There are few global institutions are- *World Trade Organization (WTO) *International Monitory Fund (IMF) *World Bank (WB) *United Nation (UN) We need global institutions because it helps to manage, regulate...
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...aspects involving globalization. One primary facet includes the globalization of markets that merges “historically distinct and separate national markets into one huge global marketplace” is classified as the globalization of markets (Hill, 2009, p. 6). The advancement of technology has increased international communication, resulting in the fall of national barriers, and the escalation of cross-border trade. Consumer preferences are crossing international borders and cultures enhancing global market trade. Products such as Coca-Cola soft drinks, McDonald’s hamburgers, and Sony PlayStation games are examples of the success of global market creation. Another primary aspect of globalization is the globalization of production. This process includes “the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labor, energy, land, and capital)” (Hill, 2009, p. 7). Globalizing production allows businesses to compete more effectively, resulting in higher product quality and lower overall costs. There are quite a few traditional international trade theories that support the concept of globalization. One is Adam Smith’s theory of absolute advantage proposed in 1776. Smith’s theory explained “why unrestricted free trade is beneficial to a country” (Hill, 2009, p. 168). Building on Smith’s absolute advantage was another theory developed by 19th-century English economist, David Ricardo...
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