Lesson #7 Flashcards
Multinational corporations
Owning businesses in 2 or more countries
Trade barriers
Government regulations that increase cost and restrict goods
Tariff
Direct tax on imported goods
Non tariff barriers
Non tax methods to reduce imported goods
Non tariff barriers: Quotas
Limited on volume of imported products
Non tariff barriers: Voluntary export restraints
Voluntary limits on the number of products exported
Government import standards
Standards to protect health and safety
Government subsidies
Financial help given to domestic companies
Customs valuation/classification
Classification of imports to determine tariff size
World Trade Organization (WTO)
Organization with rules of trade
Regional trading zones
Areas in which tariffs are reduced or eliminated
Europe’s Maastricht Treaty
Trade agreement between most European countries
NAFTA
Trade agreement between US, Canada and Mexico
CAFTA
Trade agreement between US, DR, and Central America
Global consistency
When a multinational company runs using the same rules in each country
Exporting
Selling domestic trade products to foreign countries
Cooperative contract
Agreement where a foreign business owner pays a company a fee for the right to conduct that business is their country
Strategic alliance
Agreement where companies combine resources,cost, risk,etc
Joint venture
2 independent companies collaborate to form a third
Wholly owned affiliates
Foreign offices that are 100% owned by the parent company
Purchasing power
Cost of a standard set of goods and services in different countries
Political uncertainty
Risk of major changes that can result in war, etc
Policy uncertainty
Changes in law/government that directly affect companies
Expatriate
Someone who lives and works outside their native country
