1 / 23

Global Marketing Management Global Trade Environment

Global Marketing Management Global Trade Environment. MKTG 3231-001 Fall 2013 Mrs. Tamara L. Cohen. Class #2. KEY TERMS. BoP (Balance of Payments) Globalization Protectionism Trade barriers Tariff = government tax on goods entering at borders

Download Presentation

Global Marketing Management Global Trade Environment

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Global Marketing ManagementGlobal TradeEnvironment MKTG 3231-001 Fall 2013 Mrs. Tamara L. Cohen Class #2

  2. KEY TERMS • BoP (Balance of Payments) • Globalization • Protectionism • Trade barriers • Tariff = government tax on goods entering at borders • Omnibus Trade and Competitiveness Act – designed to help US businesses be more competitive in world markets, & address perceived injustices in trade practices • GATT (General Agreement on Tariffs & Trade)

  3. GLOBAL TRADE ENVIRONMENT Reading #1: • Article by Stephen Spruiell: “Protectionism - Tariffs, Subsidies, and Trade Policy”

  4. KEY ORGANIZATION WTO(World Trade Organization) • only global international organization dealing with rules of trade between nations • goal to help producers of goods & services, exporters, & importers conduct business • established 1995 • 157 member countries • HQ Geneva, Switzerland • currency Swiss francs (CHF)

  5. KEY ORGANIZATION World Bank • vital source of financial & technical assistance to developing countries around world • mission to fight poverty; help people help themselves & environment by providing resources, sharing knowledge, building capacity & forging partnerships in public & private sectors • established 1944 • 187 member countries • HQ Washington DC

  6. IMF(International Monetary Fund) oversees international monetary system by following macroeconomic policies of member countries goal to stabilize international exchange rates & facilitate development by encouraging members to eliminate restrictions that hinder trade offers highly leveraged loans, mainly to poorer countries established 1944 188 member countries HQ Washington, DC currency SDR (Special Drawing Rights) = “paper gold” US$1 = SDR 0.6511580000as of Jan.11, 2013 KEY ORGANIZATION

  7. Protests against Global Institutions • basic complaints against WTO, IMF & others are unintended consequences of globalization • environmental concerns • worker exploitation & domestic job losses • cultural extinction • higher oil prices • diminished sovereignty of nations • “anti-sweatshop” campaigns

  8. Top 15 US trading partners in 2011in US$ billions

  9. Last ½ of 20th century marred by competing approaches to economic development Socialist Marxist vs Democratic Capitalist Rapid growth of war-torn economies & previously underdeveloped countries Large-scale economic cooperation & assistance Rising standards of living History of International Trade:20th Century vs

  10. Trade Barriers • Tariffs • Quotas • Voluntary Export Restraints • Boycotts & Embargoes • Monetary barriers • blocked currency • differential exchange • government approval • Standards • health • safety • product quality • Anti-dumping penalties RED TAPE

  11. Types of Nontariff Barriers

  12. Outsourcing & subcontracting have assumed international dimensions. International Procurement Organizations (IPOs) opening in developing countries like India, China, Mexico, Brazil. 35 US states ban outsourcing of government contracts US companies receiving government funding are likely to bar or restrict outsourcing. World's total market for outsourcing business growing at 9% p.a. Indian market growth 54% p.a. e.g. It costs $60,000 to fly an empty aircraft from US to Singapore for servicing / maintenance checks. Wage rates for skilled aircraft engineers in Singapore are so low compared to the US, that the flying cost is more than made up. ProtectionismGovernmental Procurement Policies

  13. 2010 Google Inc threatened to quit China, the world's biggest Internet market, warning it would no longer tolerate strict censorship of its Google.cn search engine. Google issued its warning after discovering what it called "a sophisticated and targeted" cyber attack on its email service. Google said it believed hackers were targeting Chinese human rights activists. 2011 Under the new game plan, Google is targeting Chinese firms to advertise on its dominant overseas search market ... Google is betting that rapidly-growing Chinese exporters, keen to reach out to overseas customers, will make use of the company's global reach through its international search sites. ProtectionismGovernment StandardsGoogle threatened to quit China

  14. Protectionismin the cotton fieldsThe US vs Brazil cotton war • US cotton farmers get government subsidies. • These subsidies are illegal, by WTO rules. • Brazil filed complaint & won. • US kept paying cotton farmers. Now US pays Brazilian farmers too.

  15. Dumping In international trade, DUMPING occurs when one country exports a significant amount of goods to another country at prices much lower than in the domestic market. • effectively dumping ispredatory pricing • seen as a form of protectionism in international trade, when endorsed by government

  16. QUOTAS on Chinese tires • Leo W. Gerard, USW international president: “American workers are struggling to make it through the worst economic crisis in 80 years. Our tire industry is collapsing under the weight of 46 million Chinese tires entering our shrinking market annually.” • U.S. Int’l Trade Commission supported this claim. Pres. Obama imposed quotas.

  17. “For years, the US complained that other countries boosted their domestic auto industries through subsidies and special favors.” “At the heart of the foreign auto makers’ concerns is the authority of regulators to set standards for individual car classes and companies.” Subsidies & Special Favors?

  18. Protectionist policies in police fleets Italy Germany Czech Republic Japan USA

  19. The Omnibus Trade & Competitiveness Act 1988 • Designed to deal with trade deficits, protectionism, & overall fairness of US trading partners • Covers 3 critical areas in improving US trade • market access (openness of markets to US goods) • export expansion (incl. Foreign Corrupt Practices Act) • import relief (remedies for US co’s affected by imports) • 4 ongoing activities support growth of international trade • GATT • WTO • IMF • World Bank

  20. General Agreement on Tariffs & Trade • paved way for 1st effective worldwide tariff agreement eliminating international trade barriers • basic elements of GATT • Trade shall be conducted on a nondiscriminatory basis. • Protection shall be afforded domestic industries through customs tariffs, not through such commercial measures as import quotas. • Consultation shall be the primary method used to solve global trade problems.

  21. Skirting the Spirit of GATT & WTO • Loopholes • tariffs + number & scope of technical standards & inspection requirements • Imposing antidumping duties • Negotiating bilateral trade agreements • may lead to multinational concessions • not necessarily consistent with WTO goals & aspirations

  22. What do we know about the Global Trade Environment? • Benefits from absolute or comparative advantage can accrue to any nation • Pressure for protectionism from every region of globe; increased by economic constrictions • Consumers seldom benefit from protectionism • Free international markets help underdeveloped countries become self-sufficient • Freer trade will always be partially threatened by various government & market barriers that exist or are created for protection of local businesses • Future of open global markets lies with controlled & equitable reduction of trade barriers

  23. Next class: Global Cultural Environment Preparation: Course Pack, reading #5 Homework: Knife & Fork exercise

More Related