Download Understanding Trade Barriers and their Impact on Global Markets and more Slides Marketing in PDF only on Docsity! Learning Objectives • The basis for the reestablishment of world trade following World War II • The effects of protectionism on world trade • The seven types of trade barriers • The provisions of the Omnibus Trade and Competitiveness Act • The importance of GATT and the World Trade Organization • The emergence of the International Monetary Fund and the World Bank Group docsity.com Global Perspective Trade Barriers – An International Marketer’s Minefield • Every country seems to take advantage of the open U.S. market while putting barriers in the way of U.S. exports. • Barriers to trade, both tariff and nontariff, are one of the major issues confronting international marketers. • If the benefits of the social, political, and economic changes now taking place are to be fully realized, free trade must prevail throughout the global marketplace. - WTO (World Trade Organization) docsity.com World Trade and U.S. Multinationals • 1950s, many U.S. companies that had never before marketed outside the U.S. began to export, others invested in production facilities overseas. • 1960s, U.S. multinational corporations (MNCs) were facing major challenges on two fronts: - Resistance to direct investment - Increasing competition in export markets • American MNCs were confronted by a resurgence of competition from all over the world. - NIC (Newly Industrialized Countries) docsity.com World Trade and U.S. Multinationals (continued) • The Balance of Merchandise Trade - U.S. Trade Deficit • U.S. dilemma of how to encourage trading partners to reciprocate with open access to their markets without provoking increased protectionism. - WTO (World Trade Organization - APEC (Asia-Pacific Economic Cooperation Conference) - NAFTA docsity.com Protection Logic and Illogic Protection of infant industry or home market Need to keep money at home Encouragement of capital accumulation Maintenance of the standard of living and real wages Conservation of natural resources Industrialization of a low-wage nation Maintenance of employment and reduction of unemployment National defense Retaliation and bargaining docsity.com General Agreement on Tariffs and Trade • Paved the way for the first worldwide tariff agreement. • Basic Elements of the GATT: - Trade shall be conducted on a nondiscriminatory basis - Protection shall be afforded domestic industries through customs tariffs, not through such commercial measures as import quotas - Consultation shall be the primary method used to solve global trade problems. docsity.com World Trade Organization • An institution, not an agreement • Sets rules governing trade between its 148 members • Provides experts to rule on trade disputes • Issues binding decisions • All member countries will have equal representation • Trouble with U.S. ratification: - Concern for the possible loss of sovereignty over its trade laws to WTO - The lack of veto power • Skirting the Spirit of GATT and WTO docsity.com The International Monetary Fund • Created to assist nations in becoming and remaining economically viable. • Objectives of the IMF: - Stabilization of foreign exchange rates - Establishment of freely convertible currencies to facilitate the expansion and balanced growth of international trade • Special Drawing Rights (SDRs) - “paper gold” docsity.com
