1. International Business, 8th Edition
Griffin & Pustay
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2. Copyright © 2015 Pearson Education, Inc.
Learning Objectives
Present the major arguments in favor of and against governmental intervention in international trade
Identify the advantages and disadvantages of adopting an industrial policy
Analyze the role of domestic politics in formulating a country’s international trade policies
Describe the major tools countries use to restrict trade
Specify the techniques countries use to promote international trade
Explain how countries protect themselves against unfair trade practices
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3. Rationale for Trade Intervention
Two Principals
Industry-Level Arguments
National Defense
Infant Industry
Maintenance of Existing Jobs
Strategic Trade Theory
National Trade Policies
Economic Development Program
Industrial Policy
Public Choice Analysis
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4. Barriers to International Trade
Tariff barriers
Import tariff
Ad valorem tariff
Specific tariff
Compound tariff
Export tariff
Transit tariff
Nontariff barriers
Quota
Numerical export control
Other nontariff barriers.
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5. Other Nontariff Barriers
Product and Testing Standards
Restricted Access to Distribution Network
Public-Sector Procurement Policies
Local-Purchase Requirements
Regulatory Controls
Currency Controls
Investment Controls
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6. Promotion of International Trade
Economic Development Incentives
Subsidies
Maquiladora System
Foreign Trade Zones
Government-Owned Agencies
Export Financing Programs
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7. Controlling Unfair Trade Practices
Ad Valorem Tariff
Countervailing Duties (CVD)
International Price Discrimination
Predatory Pricing
Antidumping Regulations
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8. International Business, 8th Edition
Griffin & Pustay
Copyright © 2015 Pearson Education, Inc.

9. Copyright © 2015 Pearson Education, Inc.
Learning Objectives
Explain the importance of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) to international businesses
Contrast the different forms of economic integration among cooperating countries
Analyze the opportunities for international businesses created by completion of the European Union’s internal market
Describe the other major trading blocs in today’s world economy
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10. Copyright © 2015 Pearson Education, Inc.
The General Agreement on Tariffs and Trade and the World Trade Organization (GATT & WTO)
Never came into being
IT0
Took over ITA’s mission: Promote Trade
GATT
Adopted GATT’s mission
WTO
To ensure that the post–World War II international peace would not be threatened by trade wars, representatives of the leading trading nations met in Havana, Cuba, in 1947 to create the International Trade Organization (ITO). The ITO’s mission was to promote trade; however, the organization never came into being. Instead its mission was taken over by the General Agreement on Tariffs and Trade (GATT), which had been developed as part of the preparations for the Havana conference. The GATT provided a forum for trade ministers to discuss policies and problems of common concern. In January 1995, it was replaced by the World Trade Organization, which adopted the GATT’s mission.
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The Role of the GATT
Free and Competitive International Trading Environment
Most Favored Nation (MFN) Principle
Generalized System of Preferences (GSP)
Economic Integration
The WTO
Primary Goals:
Promote International Trade
Reduce Trade Barriers
Resolve Trade Disputes
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12. Regional Economic Integration
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13. Impact of Economic Integration on Firms
pros
cons
Open Markets of Member Countries
Lower Production and Distribution Costs
Improve International Competitiveness
Threaten Less- Efficient Firms
Harms Specific Sectors in the Economy
Favors Powerful Special Interest Groups
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14. The struggle to create common market
The European Union
The European council
The council of EU
The European commission
The European Parliament
The European court of justice
Governing the EU
Harmonization
Mutual Recognition
“White Paper”
Single European Act
The struggle to create common market
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15. Other Free-Trade Agreements in the Americas
North American Free Trade Agreement (NAFTA)
The Caribbean Basin Initiative (CBI)
Central America-Dominican Republic Free Trade Agreement (CAFTA-DR)
The Mercosur Accord
The Andean Community
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16. Trade Arrangements in the Asia-Pacific Region
Australia-New Zealand Agreement (ANZCERTA or CER)
Association of Southeastern Asian Nations (ASEAN)
Asia-Pacific Economic Cooperation Initiative (APEC)
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17. African Initiatives The Southern African Development Community (SADC)
The Economic and Monetary Community of Central Africa (CEMAC)
The Economic Community of West African States (ECOWAS)
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Q & A SESSION
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