The global context of business - terms

business essentials -- part 4 -- terms

globalization -- processed by which the world economy is becoming a single interdependent system
import -- product made or growing overall but is sold domestically
export -- product made or growing domestically the shift in sold abroad
general agreement on tariffs and trade (GATT) -- international trade agreement to encourage the multilateral reduction or elimination of trade barriers
North American free trade agreement (NAFTA) -- agreement to gradually eliminate tariffs and other trade barriers among the United States, Canada and Mexico
European Union (EU) -- agreement among major Western European nations to eliminate or make uniform most trade barriers affecting group members
World Trade Organization (WTO) -- organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices
absolute advantage -- the ability to produce something more efficiently than any other country can
comparative advantage -- the ability to produce some products more efficiently than others
national competitive advantage -- international competitive advantage stemming from a combination of factor conditions, demand conditions, related and supporting industries, firm strategies, structures, and rivalries
balance of trade -- economic value of all products a country exports minus the economic value of all products it imports
trade deficit -- situation in which a country's imports exceeds its imports, creating a negative balance of trade
trade surplus -- situation in which a country's exports exceed its imports, creating a positive balance of trade
balance of payment -- flow of all money into or out of a country
exchange rate -- rate at which the currency of one nation can be exchanged for the currency of another country
Euro -- a common courtesy shared among most of the members of the European union (excluding Denmark, Sweden, and the United Kingdom)
exporter -- firm that distributes and sells products to one or more foreign countries
importer -- firm that buys products and foreign markets and then imports them for resale in its own country
international firm -- firm that conducts a significant portion of its business in a foreign country
multinational firm -- firm that designs, produces, and markets products in many nations
independent agent -- for an individual or organization that agrees to represent exporters interests
licensing arrangement -- arrangement in which firms choose foreign individuals or organizations to manufacture or market their products in another country
branch office -- foreign office set up by an international war multinational firm
strategic alliance -- arrangement or joint venture, in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partners country
foreign direct investment (FDI) -- arrangement in which a firm buys or establishes tangible assets and another country
quota -- restriction on the number of products of a certain type that can be imported into a country
embargo -- government order tanning exportation and/or importation of a particular product or all products from a particular country
tariff -- tax levied on imported products
subsidy -- government payment to help a domestic business compete with foreign firms
protectionism -- practice of protecting domestic businesses against foreign competition
local content law -- law requiring that product sold in a particular country be at least partly made there
business practice law -- law or regulation governing business practices in a given country
cartel -- association of producers whose purpose is to control supply and prices
dumping -- practice of selling a product abroad for less than the cost of production