ch 3 global marketing environment
TRANSCRIPT
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Marhana M. Anuar
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` The environment for world trade
` World trade organization (WTO)
` General Agreement on Tariffs and Trade
` Free Trade Areas` North American Free Trade Agreement (NAFTA)
` European Union (EU)
` Association of South East Asian Nations (ASEAN)
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` Developed in January 1, 1995
` Base in Geneva
` Objective of existence:
to provide a forum for trade-related negotiationsamong 150 members
Overcome trade disputes - WTO has a Dispute
Settlement Body (DSB)
WTO member nations meet annually to work onimproving world trade.
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` A treaty among nation whose governments agree
to promote trade among members.
` Involves with:
Liberalizing world trade merchandiseHandle trade disputes handled 300 trade
disputes
Examples of trade disputes: US,EU and Canada
vs. China. China imposed high tariffs on importedauto parts.
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` Is a mechanism that confers special treatment on
selected trading partners.
Free Trade Area
Customs UnionCommon Market
Economic Union
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` FTA is formed when two or more countries agree
to eliminate tariffs and otherbarriers that restrict
trade.
` Objective of FTA:` To have zero duties on goods that across borders
between the partners.
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` Members of customs union agree to establish a
common external tariffs (CETs) and quota system.
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` The next level of economic integration
` In addition to the removal of internal barriers to
trade and the establishment of common external
tariffs, the common market allows for freemovement of factors of production, including labor
and capital.
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` It seeks to coordinate and harmonize economic
and social policy within the union to facilitate the
free flow of capital, labor, and goods and services
from country to country.` A common place for goods, services and capital.
` Involves; unified central bank, single currency,
common policies on agriculture, social services,
regional development, taxation etc.
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` Agreement approved in 1994.
` A free trade area with population of 430 million
and GNI 14 trillion.
` Why NAFTA?` To promote economic growth through tariff
elimination and expanded trade and investment.
` Still no common external tariffs and restriction of
labor and other factor movements beeneliminated.
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` Established in 1967.
` Organization for economic, political, social, andcultural cooperation among its member countries.
` Member countries include Brunei, Indonesia,Malaysia, Philippines, Singapore, Thailand,Cambodia, Laos, Myanmar.
` Recently, Japan, China and Korea are addedcalled ASEAN plus three.
` Expanded to include Australia, New Zealand andIndia called ASEAN plus six.
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` ASEAN countries are active in regional and global
trade. ASEANs top trading partners are Japan, US,
the EU and China.
` A constant problem was the consensus among all
members.
` Although countries are geographically close, they
have historically been divided in many respects.
` In 1994, member nations agreed to implement ASEAN
Free Trade Area (AFTA), recent progress at reducing
intra-regional tariff reductions.
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` Is working on the establishment ofEast Asian
Community, with the first step being the
establishment of an East Asian Free Trade Area.
Singapore represents a special case among theASEAN nations, it has an extremely efficient
infrastructure and it is the worlds second-largest
container port.
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` The members include Belgium, France, Holland, Italy,
Luxembourg and West Germany.
` In 1973, add Great Britain, Denmark, and Ireland.
`
Then Greece (1981) and Spain and Portugal (1986).` In 1992, Finland, Sweden and Austria joined EU.
` In 2004, include Cyprus, Czech Republic, Estonia,
Hungary, Poland, Latvia, Lithuania, Malta, the Slovak
Republic, and Slovenia.
` In 2007, also include Bulgaria and Romania.
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` Objectives:
` To harmonize national laws and regulations so
that goods, services, people and eventually
money can flow freely across countries.` Citizens are now able to freely cross borders
within the union.
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` EU represent 490 million people and GNI of nearly
15 trillion.
` European Monetary System (EMS).
` EMS based on the European currency unit (ECU).` The single currency era began in January 1, 1999.
` Single currency provides benefits such as
eliminating costs associated with currency
conversion and exchange rate uncertainty.
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Thank you
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` 1. Explain the role of WTO.
` 2. Describe the similarities and differencesbetween a free trade area, a customs union, a
common market, and an economic union.