Balance of Trade You have probably read or heard about the fact that the US has a trade deficit. Trade deficit - An economic measure of a negative balance of trade in which a country's imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.

The Trade When a country has a trade deficit, more money flows out of the country than into it. If more money flows out of the country than into it from tourism and other sources, the country may experience declining production and higher unemployment, because there is less money available for spending. International Trade BarriersInternational Trade Barriers Tariff Non Tariff barriers to trade Import Lisences Export licenses Import Qoutas Subsidies Voluntary export restraints Local content requirements Embargo Economic Barriers Economic barriers to trade consist of the economic structure of a foreign country, its foreign trade policies and strategies, exchange rate regime as well as its macroeconomic policies.

Economic DevelopmentEconomic Development industrialized nations economically advanced countries such as the United States, Japan, Great Britain, and Canada. Exchange Rate Ethical, Legal, and Political Barriers

● Laws and Regulation ● Tariffs and Trade Restrictions

● Exchange Control ● Quota ● Embargo

Political barriers Tariffs, embargoes, or other types of trade restriction cartel

Social and Cultural Barriers Most business people engaged in international trade under estimate the importance of social and cultural difference; but these difference can derail an importance transaction. Technological Barriers Many countries lack the technology infrastructures found in the united states, and some marketers are viewing such barriers as opportunities.

Trade Agreements, Alliances and Organizations Various regional trade agreements, such as the north american free trade agreement and the European Union, also promote trade among member nations by eliminating tariffs and trade restriction. General Agreement on Tariffs and trade

World Trade Organization

WTO International organization WTO trade agreement Goals

The North American Free Trade Agreement(NAFTA) January 1, 1994 Canada and Mexico Canada – 33.4 million Mexico – million

European Union Also called European Community Belgium, France, Italy, West Germany, Luxembourg 1991 – Netherlands, East and West Germany 1995 – United Kingdom, Spain, Denmark, Greece, Portugal, Ireland, Austria, Finland Sweden Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia 2007 – Bulgaria, Romania Cyprus, Malta

- Asia Pacific Economic Cooperation - Established in APEC - Pro- motes open trade, economic and technical cooperation.

Japanese and South Koreans - Made a tremendous inroads on world markets for automobiles, motor- cycles, watches, cameras, and audio and video equipment.

The People’s Republic of China - Launched a program of economic reform to stimulate its economy by privatizing many industries, restructing its banking system and increasing public spending on infrastructure.

China ranks the worlds largest importer and exporter. On the negative side, China became the world’s largest emitter of greenhouse gases in China overtook the US as the country w/ the largest no. of Internet users in 2008.

World Bank - International Bank for Reconstruction and Development. - established by the industrialized nations, including the United States, in 1946.

Getting Involved in International Business Exporting and Importing Trading Companies Licensing and Franchising Contract Manufacturing Joint Ventures and alliances Direct Investment Multinational Corporation