Introduction to Business, Business in a Global Economy Slide 1 of 64 Global Competition Global competition often leads to trade disputes between countries. At the heart of most trade disputes is whether there should be limits on trade.

Introduction to Business, Business in a Global Economy Slide 2 of 64 Protectionism Protectionism is the practice of putting limits on foreign trade to protect businesses at home.

Introduction to Business, Business in a Global Economy Slide 3 of 64 Protectionism Some of the reasons in favor of protectionism are: Foreign competition can lower the demand for products made at home. continued

Introduction to Business, Business in a Global Economy Slide 4 of 64 Protectionism Companies at home need to be protected from unfair foreign competition. Industries that make products related to national defense need to be protected. continued

Introduction to Business, Business in a Global Economy Slide 5 of 64 Protectionism The use of cheap labor in other countries can lower wages or threaten jobs at home. A country can become too dependent on another country for important products like oil, steel, or grain. continued

Introduction to Business, Business in a Global Economy Slide 6 of 64 Protectionism Other countries might not have the same environmental or human rights standards.

Introduction to Business, Business in a Global Economy Slide 7 of 64 Trade Barriers To limit competition from other countries, governments put up trade barriers to keep foreign products out.

Introduction to Business, Business in a Global Economy Slide 8 of 64 Trade Barriers A tariff is a tax placed on imports to increase their price in the domestic market.

Introduction to Business, Business in a Global Economy Slide 9 of 64 Trade Barriers A quota is a limit placed on the quantities of a product that can be imported.

Introduction to Business, Business in a Global Economy Slide 10 of 64 Trade Barriers An embargo is when the government decides to stop an import or export of a product.

Introduction to Business, Business in a Global Economy Slide 11 of 64 Free Trade Supporters of free trade believe there should be no limits on trade.

Introduction to Business, Business in a Global Economy Slide 12 of 64 Free Trade The benefits of free trade are: It opens up new markets in other countries. It creates new jobs, especially in areas related to global trade. continued

Introduction to Business, Business in a Global Economy Slide 13 of 64 Free Trade Competition forces businesses to be more efficient and productive. Consumers have more choice in the variety, price, and quality of products. continued

Introduction to Business, Business in a Global Economy Slide 14 of 64 Free Trade It promotes cultural understanding and cooperation between countries. It helps all countries raise their standard of living.

Introduction to Business, Business in a Global Economy Slide 15 of 64 Trade Alliances To reduce limits on trade more countries are forming trade alliances with each other. In a trade alliance, several countries merge their economies into one huge market.

Introduction to Business, Business in a Global Economy Slide 16 of 64 Trade Alliances NAFTA (North American Free Trade Agreement) was controversial because some workers would be displaced when trade barriers were lowered.

Introduction to Business, Business in a Global Economy Slide 17 of 64 Trade Alliances Some of the major trade alliances in the world today are: NAFTA European Union (EU) Association of Southeast Asian Nations (ASEAN)

Introduction to Business, Business in a Global Economy Slide 18 of 64 Figure 10.2 MAP OF TRADE ALLIANCES IN THE WORLD The European Union (EU) is the oldest and best- known economic community formed to promote free trade among the members of the community and to foster common economic policies.

Introduction to Business, Business in a Global Economy Slide 19 of 64 International Business and Finance Affects Everyone Understanding international business and finance has become increasingly important for the consumer, wage earner, investor, citizen, and business leader.

Introduction to Business, Business in a Global Economy Slide 20 of 64 International Business and Finance Affects Everyone An understanding of international business helps you understand why goods and services are at particular prices.

Introduction to Business, Business in a Global Economy Slide 21 of 64 International Business and Finance Affects Everyone The business leader of tomorrow will have a good grasp of international business and finance.