GMS 522 - CLASS 3- AUDIO- Global Marketing: Trade and Protectionism

Global Marketing: External Environment - Trade

Course Structure Overview

  • First Half: External Environment (Uncontrollable)

    • Definitions (e.g., what is global marketing?)

    • Culture

    • Trade

    • Economic environment

    • Political environment

  • Second Half: Internal Environment (Controllable)

    • Entry mode (how firms enter a country)

    • Strategy within the host country

Lab Sessions

  • Teaching assistants for labs are expected to meet with the instructor soon.

  • Labs are tentatively scheduled to start on Monday; an announcement and Zoom links will be posted on D2L, and an email may be sent.

Benefits of International Trade

  • Access to Diverse Products: Consumers gain access to goods not produced domestically (e.g., year-round bananas in Canada, which does not grow them, in exchange for products like maple syrup).

  • Source of Revenue: Governments collect tariffs (taxes on imports/exports) that can be used for public services (e.g., schools, hospitals).

Key Trade Definitions

  • Exports: Products produced in the home country and sold abroad.

  • Imports: Products produced abroad and sold in the home country.

  • Trade Balance: Exports minus imports.

    • Trade Surplus: Positive trade balance (>0).

    • Trade Deficit: Negative trade balance (<0).

Global Trade Dependency Statistics

  • Canada: Approximately 51\% of its Gross Domestic Product (GDP) comes from international trade.

  • Germany: Nearly 67\% of its GDP comes from international trade.

  • United States: Only 9\% of its GDP comes from international trade, indicating much less dependency on other countries compared to Canada or Germany.

Canada-US Trade Relationship

  • Export Destination: 79\% of Canada's exports go to the United States.

  • Vulnerability vs. Advantage: This high dependency creates vulnerability if the relationship deteriorates.

    • Argument for Vulnerability: If something goes wrong, Canada is significantly impacted.

    • Argument for Advantage: Proximity to the world's richest and most powerful country offers benefits, including ease of logistics (geographic proximity) and generally similar political systems.

NAFTA and USMCA (CUSMA/T-MEC)

  • Trump's Stance on NAFTA (North American Free Trade Agreement):

    • During his first term (and before), labeled NAFTA as the