The Institute Of Finance & Administration INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D.

2.2. INTERNATIONAL BUSINESS Full-time course = 12 lectures (summer term 2009)  What is international business, what it consists in  International environment  IB importance + influences  Basic IB indicators  Structure of IB  Way of controling IB  INTERNATIONALIZATION: dimensions, motives  Entry modes  International TRADE, CONTRACTUAL and INVESTMENT business activities Within lectures: - practical discussions on topical economical issues - article: reading + analyses - team prezentations & team competition INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

3.3. CREDIT conditions B_IB Full-time course = 12 lectures (summer term 2009) INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. / CONDITIONS: PRESENCE at IB lectures: 50% short TEAM PRESENTATION - preparation at home: 8-10 min. presentation on topical economical issue lecture points based on active PARTICIPATION – communication, reading and discussing topical economic issues / team knowledge competition

4.4. Lecture content  Global environment  GATT x WTO  Forms of Economic Integration  Culture and its impact on International Business INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

5.5. International ENVIRONMENT INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. / GLOBAL MACRO MICRO

6.6. Global environment  in IB we are not limited by the national borders, no matter the size & type of company  change of global COMPETITION as a consequence of regional TRADING & MANUFACTURING agreements INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

Barter / Import / Export / other movement of goods & services International TRADE FDI / WOS etc. International INVESTMENT Licensing / Franchising / Alliances / Management contracts etc. Other forms of int. business ACTIVITY 7.7. INTERNATIONAL BUSINESS CONSISTS IN: INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

8.8. GATT – General Agreement on Tariffs & Trade  set up in 1947 to prevent causes leading to Great depression (in 1930’s) AIM:  to REDUCE barriers to international trade  to PROMOTE a free & competitive trading environment  to ensure the int. trade is conducted on a NON- DISCRIMINATORY basis  by MFN principle (Most Favored Nation) INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

9.9. WTO – World Trade Organization  created by GATT at Uruguay round in 1995  development of IB, more powerful non-tariff barriers  WTO granted more power than GATT AIM:  to PROMOTE flows by encouraging nations to adopt non-discriminatory & predictable trade policies  to REDUCE remaining trade barriers (emphasis on agricultural tariffs & subsidies + relaxing intellectual prop.rights of Pharmaceuticals in less developed countries)  establish IMPARTIAL PROCEDURES for resolving trade disputes INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

sectors that receive GOV protection in every country: AGRICULTURE & TEXTILES Distortion by SUBSIDIES, import RESTRICTIONS etc. Problem SECTORS Reduce barriers to trade in services (= diverse & complicated) GATS – General Agreement on Trade in Services Inadequate enforcement of laws prohibiting illegal usage or copying of intellectual property (music, film, SW, pharma) Efforts to RELAX int.prop.rights in case of LIFE-SAVING DRUGS in under-developed countries TRIPS – agreement on Trade-Related Aspects of Intellectual Property Rights Control of FDIs TRIMS – Trade-Related Investment Measures Agreement 10. WTO challenges INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

11. Forms of integration Economic (currency) & Political union Common marketCustoms unionFree trade area INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

27 countries, eurozone, free movement of goods, services, capital & labor EU – European Union since 1992, (Mexico, Canada, USA) Agreement on reduction of duties and further barriers (import licenses and import taxes) NAFTA Other Latin-American countries – free trade area (members: Columbia, Mexico and Venezuela) FTAA – Free Trade Area of Americas Trade union of 10 nations South-East Asia (Laos, Myanmar, Thailand, Cambodia, Vietnam, Brunei, Malai, Singapur, Indonesia) South-East Asia = the most growing economy of the world -> important to create alliance to compete with NAFTA or EU ASEAN 12. International unions & agreements INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

13. Impact of Economic Integration on firms DISADVANTAGES - exposes a firm’s home market to competition INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. / ADVANTAGES - opens markets - capturing Economies of Scale (= larger market =>lowering Ø production & distrib. cost)  firms’ viewpoint: integration = two-sided sward

state decides about their imposition TARIFF x NON-TARIFF state’s intention: either reduce IMPORT or support EXPORT AUTONOMOUS (independent, one-sided) result of negotiations BILATERAL (business agreements, credit / loan agreements etc.) MULTILATERAL (integration unions) bilaterální (dvoustranné): CONTRACTUAL 14. State IB policy INSTRUMENTS INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

15. Summary of basic IB BARRIERS WEAK IB Prohibitive TARIFFS QUOTAS IMPORT DUTIES Other PROTECTI- ONIST measures Sanctions & Embargo Dual use / ‘use conditional’ Nationali- zation INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

16. Tariff & Non-tariff measures NON-TARIFF Quota = qty restriction INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. / TARIFF - Fiscal - Protective - Retributive - Prohibitive  have important effects on consumption, production & structure of a domestic economy  reason for imposing = e.g. protect infant industries

17. Summary of basic IB BARRIERS WEAK IB Prohibitive TARIFFS QUOTAS IMPORT DUTIES Other PROTECTI- ONIST measures Sanctions & Embargo Dual use / ‘use conditional’ Nationali- zation INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

-Global environment -International Business: trade / investment / other -GATT -WTO -Economic Integration - forms -Economies of scale -IB barriers -Duty x Quota -Tariff x Non-tariff measures -International unions -State IB policy instruments 18. KEY terms INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /

19. Thank you for your attention Ing. Pavla Břečková, Ph.D. INTERNATIONAL BUSINESS [B_IB] Ing. Pavla Břečková, Ph.D. /