2. After reading this chapter, you should be able to: 1. Discuss the rise of international business and describe the major world marketplaces and trade agreements and alliances. 2. Explain how differences in import-export balances, exchange rates, and foreign competition determine the ways in which countries and businesses respond to the international environment. 3. Discuss the factors involved in deciding to do business internationally and in selecting the appropriate levels of international involvement and international organizational structure.

3. After reading this chapter, you should be able to: 4. Describe some of the ways in which social, cultural, economic, legal, and political differences among nations affect international business.

4. Globalization

5. Distinctions Based on Wealth Geographic Clusters

6. Significant Agreements and Treaties – North American Free Trade Agreement (NAFTA) – European Union (EU) – Association of Southeast Asian Nations (ASEAN)

9. Significant Agreements and Treaties – General Agreement on Tariffs and Trade (GATT): – World Trade Organization (WTO)

10. Balance of Trade Trade Surplus Trade Deficit.

13. Balance of Payments Exchange Rate

14. When an economy’s currency is strong: Implications for the balance of trade?

15. When an economy’s currency is weak: Implications for the balance of trade?

16. Absolute Advantage Comparative Advantage

17. National Competitive Advantage – Conditions favoring heavy involvement in international business:

18. Going International – Gauging International Demand – Adapting to Customer Needs – Outsourcing – Offshoring

19. Exporters Importers International firms Multinational firms

20. Independent Agent Licensing Arrangements (or Agreements) Branch Offices

21. Strategic Alliance (or Joint Venture) Foreign Direct Investment (FDI)

23. Quotas, Embargoes, Tariffs, and Subsidies Protectionism

24. Local Content Laws Business Practice Laws Cartels Dumping