Competing in Global Markets

International Trade Trade “wars” Trade treaties NAFTA CAFTA EU Businesses will work around government actions e.g. Ford van imports Countertrade IBM example GATT – General Agreement on Tariffs and Trade – a series of negotiations, called rounds, that substantially reduced worldwide tariffs and other barriers World Trade Organization 1. Beginning in 1995 has monitored GATT agreements among member nations 2. Unlike GATT, the WTO’s decisions are binding on parties involved 3. Concerns have been raised about WTO a. the lowering of trade barriers has encouraged nations to keep costs low, in order to compete, by using practices that harm the environment and abuse human rights b. trade unions are concerned about the export of job to countries with lower labor costs

Reducing Barriers to International Trade Organizations Promoting International Trade World Bank For infrastructure support International Monetary Fund For debt and financial aid World Bank 1. Founded shortly after WWII by industrialized countries to lend money to less-developed and developing countries 2. Primarily funds projects that build or expand the nation’s infrastructures 3. Provide the largest source of advice and assistance to developing nations 4. Critics believe the loans are often made with conditions that hurt the borrower nation and to make payments these nations have often had to cut vital social programs International Monetary Fund 1. Established one year after World Bank 2. Created to promote trade through financial cooperation and to eliminate barriers 3. Makes short-term loans to member nations that are unable to meet their budgetary expenses 4. Significant commitments are often made in order to secure the loan, which are supposed to address the underlying conditions that created the need for the loan in the first place 5. Critics believe that the IMF’s policies of placing restrictions on government spending, as a way to address underlying difficulties, often misses the real issues of insolvency 6. Also, many believe IMF has placed many poor nations in impossible positions repaid 7. Arguments in favor of debt reductions are debated

The Legal Framework of Business Antitrust monopolies are illegal no price discrimination no collusion Regulation FTC – Federal Trade Commission FCC – Federal Communications Commission FDA – Food and Drug Administration SEC – Securities and Exchange Commission

Business Law Liability Intellectual Property protection patent copyright trademark trade secret