Chapter 4: International Business

Domestic Transaction

The selling of items produced in the same country.

International Trade

The selling of items produced in one country, but sold in another.

Foreign Trade

The exchanging of goods and services across national borders.

Global Economy

When participating in international transaction, you contribute to the _____________.

Global Products

Ex. Basketballs, ballpoint pens, cotton cloth

5 p's

Product, Price, Proximity, Preference, Promotion.

Social Costs of IB

Offshore outsourcing, human rights labour abuses, and environmental degradation.

Transnational

Companies that operate in several countries, like Nike and Honda.

International Labour Organization

The United Nations specialized agency that seeks the promotion of social justice and tries to protect internationally recognized human rights and labour rights.

Sustainable Development

The process of development that tries not to damage the environment or exhaust natural resources for the future.

Environmental Degradation

The consumption of natural resources faster than nature can replenish them.

Tariffs

Tax on goods imported into Canada.

Non-tariff Barrier

Ex. Setting high standards for imported automobiles.

Landed Cost

The actual cost of an imported item. Composed of the vendor cost, transportation charges, duties, taxes, broker fees, etc.

Balance of Trade

Maintain this between the value of products they import and the value of products the export.

Trade Deficit

A country that pays more for imports than it earns in exports.

Trade Surplus

A country that pays more for exports than it earns in imports.

Direct Exporting

An organization selling goods directly to a customer in an international market.

Indirect Exporting

An organization selling goods to a customer in an international market using an intermediary.

Trade Agreements

Making trades easier by reducing trade barriers.

World Trade Organization

Established in 1995 to govern international trade.

NAFTA

The trade agreement between Canada, the US, and Mexico.

Bilateral

A trade agreement that involves two parties or two countries.

Trading Bloc

A group of countries that share the same trade interests.

Group of Eight (G8)

An association of the world's most powerful industrialized democracies, meets annually to discuss major economic and political issues.

Culture

A countries way of life composed of it’s beliefs, customs, religion, etc.

Global Dependency

Consumers demands for goods created in other countries.