International Trade

 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

 The exchange of goods and services among nations.  Imports – Goods and services purchased from other countries  Exports – Goods and services sold to other countries

 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

 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.

 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

 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

 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

 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

 Selling the same product and using the same promotion methods in all countries.

 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

 Page 91 # 7, 9, 10  Page 92 #16