Lecture 3 Flashcards
Examples of Government import and export regulations
• What Comes in – Import Controls
Tariffs (%) / Quotas (nos)
Product Prohibitions
Product Standards
• What Goes Out – Export Controls Strategic Goods Export Subsidies Special Trade Zones Gov’t buy local plans Investment Barriers
Boycotss
Embargos
Sanctions
Embargos are?
Banning specific types of exports to another country
Ex: US ‘defense’ equipment to certain countries
Boycotts are?
Banning imports / exports on another country
Ex: S. Arabia / UAE / Egypt / Bahrain AGAINST Qatar
Qantas Airways – Rev’ down 40%
Sanctions are?
Applying specific penalties to certain trade activities of other countries Banking, Oil, Tech
Ex: US / EU AGAINST Russia Malaysia Airlines Flight 17
The types and levels of world trade structures?
- Preferential Trade Agreements
- Free Trade Areas (FTA’s)
- Custom’s Union (CU’s)
- Economic Union (EU’s)
Preferential Trade Agreements are?
AUS / NZ “CER” (Approx. 20 countries)
Trading bloc that give preferential access to certain products from the participating countries. Done by reducing tariffs
Free Trade Areas (FTA’s) are?
Aim: Create special trade categories (many countries)
The region encompassing a trade bloc whose member countries have signed a free-trade agreement to reduce trade barrier – import quotas and tariffs – to increase trade.
Custom’s Union (CU’s) are?
Evolution of FTA’s, harmonizing customs barriers, develop common trade barriers to non members (Approx. 40). Have agreed to charge the same import duties as each other usually to allow free trade between themselves.
Economic Union (EU’s) are?
Participant countries have both common policies on product regulation, freedom of movement of goods, services and the factors of production and a common external trade policy
Further evolution of FTA, Free mobility labor, capital, production. Harmonies monetary, taxation and government spending (ONLY EU)
What the WTO does and it’s implications for IM and (IM) firms
- Formed in 1974 involving 164 countries and its members account for in excess of 82% world trade
- It deals with trade between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participant’s adherence to WTO agreements Ex: AUS took on CAN over ‘unfair’ wine import tariffs (current)
- The WTO has boosted trade and reduced barriers (in the absence of the WTO, the average country would face a 32% increase on in tariffs
- The different types of legal systems in (most) countries
Legal Systems
• Civil Law: Concerned with private relations between members of a community
• Common Law: Derived from custom and judicial precedent rather then statues
Difference between ‘statue law’ and ‘enforceable law’
Contract Dispute Resolution
• Conciliation: A 3rd party mediates between parties – aims to maintain an ongoing relationship
• Arbitration: A 3rd party acts as a referee on the merits of the case and make a determination that both parties agree to accept
• Litigation: Legal ruling on the merits of the case
- Country law and the marketing mix / examples
• Product ‘Law’ o Physical – Electrical Standard o Chemical – Aerosols / Fertilizers o Packaging – Materials Used o Labelling – Ingredients / Wording “Made In”
• Price ‘Law’ o Price Controls – Bread / Milk o Meaning of ‘SALE’ – ‘33% Discount – Today Only’ o Tax – Sales / Tariffs o Government Quotas – Supply / Demand
• Distribution ‘Law’ o Air Travel – Dangerous ‘Goods’ o Sea - Livestock o Road – Congestion / Taxes o Rail – Safety Standards / Border Control
• Promotion ‘Law’
o Promotional ‘Claims’ – Health
o Product Categories – Alcohol
o Words / Expressions in Advertisements – Meanings / Offensive
o Content & Style of Advertisement – Child Models
