What are some specific factors that make countries unattractive to firms looking to do business there? min 100 words 2. What are some of the factors that firms must consider before
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1. What are some specific factors that make countries unattractive to firms looking to do business there? min 100 words
2. What are some of the factors that firms must consider before deciding to begin operations in another country? min150 words
3. Werner was born and raised in Germany. He is a marketing manager at a multinational firm. When traveling for business, he is confronted with issues such as employees' tardiness to working and meetings and expects him to provide managerial directions for even the most simple tasks. What might explain these issues? 150 minimum word count
4. Jason Starks, the founder of 3P Turbo, worked with a consultant to gather some revenue and cost projections for his possible investment in Brazil to see if it would create value and make financial sense. What are some of the issues that his company faced when deciding whether or not to enter the Brazilian market? 200 minimum word count
5. Catalan Incorporated (CI) is based in the US and wants to sell its products in Mexico. Because of USMCA, there is no tariff on the products it manufactures in the US. CI currently exports its products to Mexico, and they make a good profit from the products they sell there. Because of the lower labor rates and lax regulatory environment in Mexico, CI is considering opening a manufacturing plant there to supply the Mexican market. The Mexican economy is known for its instability and its government is highly corrupt. Should CI consider opening a manufacturing plant in Mexico? Or, should CI continue to export its products? What other mode of entry might you recommend? If so, why? Explain your answer in detail. 300 minimum word count
Tariffs
| Youtube/ the best of internation trade | Absolate Advanyage: a country can produce a good more efficiently than another country |
| john taylor | comparative advantage: a country can produce a good relatively more efficiently than another good in comparison w/ an another country |
| 与另一个国家相比，一个国家可以比另一种商品相对更有效地生产一种商品 | |
| youtube/how do tariffs work | duty or a customs duty: money collected under a tariff |
| collectd by the U.S. Customs and Border Protection | |
| 贸易逆差 imports > exports | a trade deficit is the amount by which a country's imports 进口 exceed 超过 the value of its exports |
| 250 yrs Economic Theory about Tariffs | |
| by Linda Yueh | Donald Trump and Jean-Claude Juncker, president of the European Commission |
| what are tariffs? | Tariffs are taxes imposed by a country that make imports more expensive. |
| what is the author's stance on tariffs | The idea is to make foreign products less desirable and thus protect domestic industry |
| The U.S. enacted this recent round of tariffs as a response to its trade deficit (when a country buys more from abroad than it sells). | |
| The better way to reduce a trade deficit is to export more, not to reduce imports by making them more expensive. | |
| Britain rejected over a centry ago | Adam Smith, the father of economics, and David Ricardo, the father of international trade. |
| Adam Smith : treat everyone same | Adam Smith supported levying duties on imports and exports at a moderate level, should treat all traders and trading nations the same, so as to not distort the “invisible hand” (his most notable contribution in The Wealth of Nations) of the market allocating what producers should make |
| 忠实于史密斯关于政府政策不会扭曲 市场，他会为不同的生产者和 进口商，这样一个集团或一个国家就没有优势 在另一个。例如，他看到豁免产品的不公平 私人酿造和蒸馏（被富人吸收） 征收消费税，同时对穷人喜欢的酒征税。 | |
| Daivd Ricardo : | David Ricardo developed the theory of comparative advantage, which shows that nations should specialize and then trade, which led to greater prosperity. |
| Paul Samuelson | Paul Samuelson further enhanced our understanding of international trade by pointing out that there are those who benefit more, and others who benefit less, when a nation specializes, even if the economy gains overall. Thus, his work highlights the distributional impact of trade and points to ways of helping the losers of globalization. |
| Tariffs are a protectionist measure that is inefficient and also distortionary if higher taxes on some imports mean they become less competitive relative to others. | |
| 关税是一种低效的保护主义措施，而且 如果对某些进口商品征收更高的税意味着它们变得更少，那么就会造成扭曲 相对于他人的竞争力。 | |
| better ways to improve a country’s trade position, such as opening up the global market for services trade. T | |
| U.S. as the biggest exporter of services worldwide/// The UK, the second biggest exporter, | |
| selling more, rather than importing less (and thus consuming less or producing with more-expensive components), is one of the lessons to draw from history’s greatest economist | |
2 BW GATT WTO
| The Bretton Woods agreement of 1944 | 1944 established a new international monetary system. | ||||
| replace gold standard with the U.S. dollar as the global currency. | |||||
| The Bretton Woods agreement | America was the only country with the ability to print dollars | ||||
| was created in a 1944 conference of all of the World War II Allied nations. | The agreement created the World Bank and the International Monetary Fund (IMF), U.S.-backed organizations that would monitor the new system.2 | ||||
| It took place in Bretton Woods, New Hampshire. | |||||
| Key Takeaways | |||||
| The creation of Bretton Woods resulted in countries pegging their currencies to the U.S. dollar. | |||||
| In turn, the dollar was pegged to the price of gold, and the U.S. became dominant in the world economy. | |||||
| The U.S. was the only nation that could print the globally accepted currency, and countries had more flexibility than they did with the old gold standard. | |||||
| When the dollar ceased to be pegged to the price of gold, it became the monetary standard with other currencies pegging their currencies to it. | |||||
| Under the agreement, countries promised that their central banks would maintain fixed exchange rates between their currencies and the dollar. | |||||
| Purchasing currency would lower the supply of the currency and raise its price. If a currency's price became too high, the central bank would print more. This printing production would increase the supply and lower the currency's price. | |||||
| Members of the Bretton Woods system agreed to avoid trade wars. | |||||
| Why dollars? The United States held three-fourths of the world's supply of gold. No other currency had enough gold to back it as a replacement. The dollar's value was 1/35 of an ounce of gold. Bretton Woods allowed the world to slowly transition from a gold standard to a U.S. dollar standard | |||||
| Until World War I, most countries were on the gold standard. | |||||
| This inflow of currency caused hyperinflation, as the supply of money overwhelmed the demand. | |||||
| All went well until the Great Depression. After the 1929 stock market crash, investors switched to commodities trading. | |||||
| It drove up the price of gold, resulting in people redeeming their dollars for gold. | |||||
| The Federal Reserve made things worse | |||||
| The Bretton Woods system gave nations more flexibility than strict adherence to the gold standard. It also provided less volatility than a currency system with no standard at all. | |||||
| The Bretton Woods system could not have worked without the IMF. | |||||
| need a kind of global central bank they could borrow from if they needed to adjust their currency's value and didn't have the funds themselves. | |||||
| The IMF was not designed to print money and influence economies with monetary policies. | |||||
| The World Bank, despite its name, was not the world's central bank. At the time of the Bretton Woods agreement, the World Bank was set up to lend to the European countries devastated by World War II. The purpose of the World Bank changed to loaning money to economic development projects in emerging market countries | |||||
| The Collapse of the Bretton Woods System | |||||
| In 1971, the United States suffered from massive stagflation—a combination of inflation and recession, which causes unemployment and low economic growth | |||||
| Nixon devalued the dollar to 1/38 of an ounce of gold, and then to 1/42 of an ounce. | |||||
| In 1971, Nixon unhooked the value of the dollar from gold altogether. Without price controls, gold quickly shot up to $120 per ounce in the free market, ending the Bretton Woods system | |||||
| What was the Bretton Woods Agreement? | |||||
| The Bretton Woods Agreement was a 1944 meeting of the Allied nations, in which the nations agreed to peg their currencies to the dollar while the dollar was pegged to gold. The agreement went into effect in 1958 but lasted less than 20 years | |||||
| What is the gold standard? | |||||
| The gold standard was a currency measurement system in place in the United States up until the 1970s in which the value of the dollar was tied to gold. At the time of the Bretton Woods Agreement, one dollar was worth 1/35 of an ounce of gold | |||||
| Watch: The Bretton Woods Monetary System (1944 – 1971 | after World War Two , the world need a new finiancail system. The gold standard was considered | ||||
| 44 countries sent delegates conference held in BRETTON WOODS NEW HAMPSHIRE 1944, 7/1 | |||||
| ALL currency link to the dollar, the dollar was linked to gold | |||||
| two insititutions were created 1. IMF – INTERNATIONAL MONETARY FUND -lend money to counteies that in troudble and cannot attract financing from other sources | |||||
| 2. International bank for reconstruction and development which called Work bank – help less developed country scrub unfortunately as good as it may have sound on paper the Bretton Woods system did not survive because US kept running deficits to fund various projects and therefore the amount of dollars in existence kept increasing while the gold reserves of the US keep shrinking as more countries demanded gold in exchange for their dollars as such on the 1971, 8/15 / Nison said dollars would no longer be convertible to gold. putting the final nail in the confin of the Bretton system | |||||
| The GATT (General Agreement on Tariff and Trade) | (GATT) was the first multilateral free trade agreement. It first took effect in 1948 as an agreement among 23 countries, and it remained in effect until 1995, at which point its membership had grown to 128 countries. It was replaced by the World Trade Organization. | ||||
| (GATT) was a treaty created after World War II to help the economies of countries affected by the war. | |||||
| This agreement would pave the way for the creation of the World Trade Organization. | |||||
| The benefits of the GATT included an increasing interconnection among national economies, which reduced the likelihood of war and bolstered communication. | |||||
| The GATT did have drawbacks, including the requirement that countries give up some level of autonomy to adhere to the rules of the free trade agreement. | |||||
| GATT was a free trade agreement that eliminated tariffs and increased international trade.1 As the first worldwide multilateral free trade agreement, the GATT governed a significant portion of international trade between January 1, 1948, and January 1, 1995. The agreement ended when it was replaced by the more robust World Trade Organization (WTO | |||||
| The purpose of the GATT was to eliminate harmful trade protectionism, which likely contributed to the 66% reduction of global trade during the Great Depression.3 | |||||
| The GATT helped restore economic health to the world after the devastation of the Depression and World War II. | |||||
| The GATT had three main provisions. The most important requirement was that each member would confer most favored nation status to every other member. All members had to be treated equally when it came to tariffs. The agreement excluded the special tariffs among members of the British Commonwealth and customs unions. It permitted tariffs if their removal would cause serious injury to domestic producers. | |||||
| Second, the GATT prohibited restrictions on the number of imports and exports. T | |||||
| In addition, countries could restrict trade for reasons of national security. These included protecting patents, copyrights, and public morals. | |||||
| The third provision was added in 1965, addressing developing countries joining the GATT | |||||
| Member Countries | The original 23 GATT members were Australia, Belgium, Brazil, Burma (now Myanmar), Canada, Ceylon (now Sri Lanka), Chile, China, Cuba, Czechoslovakia (now the Czech Republic and Slovakia), France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia (now Zimbabwe), Syria, South Africa, the United Kingdom, and the United States.5 | ||||
| The membership increased to 128 countries by 1994. | |||||
| he GATT grew out of the Bretton Woods Agreement. The summit at Bretton Woods also created the World Bank and the International Monetary Fund to coordinate global growth. | |||||
| The summit almost led to a third organization. It was to be the highly ambitious International Trade Organization (ITO). The 50 countries that started negotiations wanted it to be an agency within the United Nations that would create rules, not just on trade, but also on employment, commodity agreements, business practices, foreign direct investment, and services. The ITO charter was agreed to in March 1948, but the U.S. Congress and some other countries' legislatures refused to ratify it. In 1950, the Truman administration declared defeat, effectively ending the ITO.7 | |||||
| At the same time, 15 countries focused on negotiating a simple trade agreement. They agreed on eliminating trade restrictions affecting $10 billion of trade, or a fifth of the world’s total. A total of 23 countries signed the GATT deal on October 30, 1947, clearing the way for it to take effect on June 30, 1948. | |||||
| he GATT didn’t require the approval of Congress. That's because, technically, the GATT was an agreement under the provisions of the U.S. Reciprocal Trade Act of 1934. | |||||
| The main goal of continued negotiations was to further reduce tariffs. In the mid-1960s, the Kennedy round added an anti-dumping agreement.8 The Tokyo round in the 1970s improved other aspects of trade. The Uruguay round lasted from 1986 to 1994 and created the World Trade Organization (WTO). | |||||
| GATT vs. WTO | |||||
| GATT | WTO | ||||
| Paved the way for the WTO | Took over in place of GATT | ||||
| A component of the WTO | Enforces aspects of GATT | ||||
| The GATT lives on as the foundation of the WTO. The 1947 agreement itself is now defunct.9 However, its provisions were incorporated into the GATT 1994 agreement, which was designed to keep the trade agreements going while the WTO was being set up. Therefore, the GATT 1994 is itself a component of the WTO Agreement. | |||||
| Pros and Cons of the GATT | |||||
| Pros | |||||
| Encourages international trade.: he GATT reduced tariffs, which boosted trade among countries. As they traded more freely with each other, more countries saw the benefits of free trade and wanted to join the agreement. By the time the GATT was replaced by the WTO, more than 100 countries had joined the original 23 signatories. | |||||
| Reduces the likelihood of war.: the GATT promoted world peace. It set the stage for the European Union (EU). Despite the EU's problems, it has helped to prevent wars among its members. The general idea is that, if your economy depends on trade with another country, then you're less likely to go to war with that county. The more countries trade with each other, the less likely war becomes. | |||||
| Improves communication.: to reducing the chances of war, the GATT provided incentives for countries to better communicate with one another. Even average citizens are more likely to learn a foreign language these days, since it allows them to access larger consumer markets than they have domestically. For instance, many people learn English, the language of the world's largest consumer market, which allows them to work for call centers for companies based in English-language countries | |||||
| Cons | |||||
| Domestic industries may struggle to compete.: Low tariffs can destroy some domestic industries, contributing to high unemployment in those sectors. Governments with more money or policy power can manipulate industries for their benefit more than smaller countries can. | |||||
| Exposes more of the world to risks within a given domestic industry. – By the 1980s, the nature of world trade had changed. The GATT did not address the trade of services that allowed them to grow beyond a single country's ability to manage them — reduced the rights of a nation to rule its own people. The agreement required them to change domestic laws in order to gain trade benefits. | |||||
| Governments cede some level of control to an international agreement. — reduced the rights of a nation to rule its own people. The agreement required them to change domestic laws in order to gain trade benefits | |||||
