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Chapter 8
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Asia-Pacific Economic Cooperation (APEC)
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regional trade agreement between Australia, Canada, Chile, the People’s Republic of China, Hong Kong, Japan, Korea, Mexico, New Zealand, Papua New Guinea, Peru, Russia, the United States, and all the members of ASEAN, except Cambodia, Laos, and Myanmar
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Association of South East Nations (ASEAN)
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regional trade agreement between Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam
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cooperative contract
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an agreement in which a foreign business owner pays a company a fee for the right to conduct that business in his or her country
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country of manufacture
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country where product is made and assembled
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country of origin
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the home country for a company, where its headquarters is located
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expatriate
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someone who lives and works outside his or her native country
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exporting
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selling domestically produced products to customers in foreign countries
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foreign direct investment
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a method of investment in which a company builds a new business or buys an existing business in a foreign country
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franchise
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a collection of networked firms in which the manufacturer or marketer of a product or service, the franchisor, licenses the entire business to another person or organization, the franchisee
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Free Trade Area of the Americas (FTAA)
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regional trade agreement that, when signed, will create a regional trading zone encompassing 36 countries in North and South America
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General Agreement on Tariffs and Trade (GATT)
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worldwide trade agreement that reduces and eliminates tariffs, limits government subsidies, and protects intellectual property
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global business
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the buying and selling of goods and services by people from different countries
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global new ventures
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new companies with sales, employees, and financing in different countries that are founded with an active global strategy
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joint venture
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a strategic alliance in which two existing companies collaborate to form a third, independent company
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licensing
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agreement in which a domestic company, the licensor, receives royalty payments for allowing another company, the licensee, to produce its product, sell its service, or use its brand name in a specified foreign market
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Maastricht Treaty of Europe
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regional trade agreement between most European countries
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multinational corporation
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corporation that owns businesses in two or more countries
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national culture
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the set of shared values and beliefs that affects the perceptions, decisions, and behaviour of the people from a particular country
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nontariff barriers
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nontax methods of increasing the cost or reducing the volume of imported goods
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North American Free Trade Agreement (NAFTA)
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regional trade agreement between the United States, Canada, and Mexico
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policy uncertainty
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the risk associated with changes in laws and government policies that directly affect the way foreign companies conduct business
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political uncertainty
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the risk of major changes in political regimes that can result from war, revolution, death of political leaders, social unrest, or other influential events
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protectionism
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a government’s use of trade barriers to shield domestic companies and their workers from foreign competition
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purchasing power
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a comparison of the relative cost of a standard set of goods and services in different countries
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quota
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limit on the number or volume of imported products
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regional trading zones
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areas in which tariff and nontariff barriers on trade between countries are reduced or eliminated
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strategic alliance
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agreement in which companies combine key resources, costs, risk, technology, and people
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subsidies
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government loans, grants, and tax deferments given to domestic companies to protect them from foreign competition
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tariff
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a direct tax on imported goods
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trade barriers
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government-imposed regulations that increase the cost and restrict the number of imported goods
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voluntary export restraints
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voluntarily imposed limits on the number or volume of products exported to a particular country
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wholly owned affiliates
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foreign offices, facilities, and manufacturing plants that are 100 percent owned by the parent company
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world gross national product
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the value of all the goods and services produced annually worldwide
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