Chapter 3 - Part 2

Flashcards covering reasons and methods for international business expansion, key exporting and trading partners, trade protectionism barriers, trade-facilitating organizations, and major trading blocs.

What are the five main reasons why companies expand internationally?

1. Availability of supplies
2. New markets
3. Lower labor costs
4. Access to finance capital
5. Avoidance of tariffs and import quotas

How do international expansion strategies rank from lowest risk and investment to highest risk and investment?

1. Global outsourcing (lowest risk & investment)
2. Importing, exporting, & countertrading
3. Licensing & franchising
4. Joint ventures
5. Wholly owned subsidiaries (highest risk & investment)

According to 2021 Statista data, what were the top ten exporting countries worldwide?

1. China
2. United States
3. Germany
4. Netherlands
5. Japan
6. Hong Kong
7. South Korea
8. Italy
9. France
10. Belgium

In November 2022, what were the top ten nations the United States exported goods to?

1. Canada
2. Mexico
3. China
4. United Kingdom
5. Japan
6. Germany
7. Netherlands
8. South Korea
9. India
10. France

In November 2022, what were the top ten nations the United States imported goods from?

1. China
2. Mexico
3. Canada
4. Germany
5. Japan
6. South Korea
7. Vietnam
8. Taiwan
9. Ireland
10. India

What is a tariff?

A trade barrier in the form of a customs duty, or tax, levied mainly on imports.

What is an import quota?

A trade barrier in the form of a limit on the quantity of a product that can be imported.

What is a sanction in the context of international trade?

The trade prohibition on certain types of products, services, or technology to another country for specific reasons, including nuclear nonproliferation, terrorism, and humanitarian concerns.

What is an embargo?

A complete ban or prohibition of trade of one country with another so that no goods or services can be imported or exported.

What are the three principal organizations designed to facilitate international trade?

1. World Trade Organization
2. World Bank
3. International Monetary Fund

What is a trading bloc?

A group of nations within a geographical region that have agreed to remove trade barriers with one another.

Which two major trading blocs are highlighted in the lecture slides?

1. United States-Mexico-Canada Agreement (USMCA)
2. EU—The 27 Countries of the European Union