MARKETING MANAGEMENT Stephen J. Miller Oklahoma State University MKTG 5133-MG 720 Lecture Week 4

GLOBAL ENVIRONMENT

3 Merchandise Trade Expansion

4 Why International Trade Balances Change Comparative Advantage Theory Factor/Proportions Theory International Product Life Cycle Theory Overlapping Demand Economies of Scale Competitive Advantage Theory

5 Porter’s Diamond

6 Why Trade Barriers Exist Desire for general industrialization Infant-Industry protection Essential industry protection Employment protection Consumer protection Culture protection

7 Why Trade Barriers Exist (Cont.) Resource protection National/Economic security protection Political punishment/retaliation Revenue generation Foreign exchange protection

8 Types of Trade Barriers Tariffs Quotas Public procurement laws Domestic content laws Professional certification Technical standards Subsidies

9 Types of Trade Agreement Discussion platform Free trade area Customs union Economic integration Full integration

10 Parties to Agreements Voluntary agreements Bilateral agreements Regional agreements Global agreements

11 Major Trade Agreements European Union NAFTA MERCOSUR ASEAN APEC GATT/WTO

12 EC - Key Initiatives Tariff elimination Border control elimination Harmonization of technical standards Freedom of movement of people Opening of government procurement Liberalization of financial barriers Social policy

13 NAFTA – Key Initiatives Tariff elimination Services and professional services Environmental protection Intellectual property Opening of government markets

14 GATT/WTO - Key Initiatives Tariff reduction/elimination Opening of markets Intellectual property protection Harmonization of standards Simplification of customs procedures Arbitration