1. 4.02 Exemplify the 4 types of economic systems, & the effects of economic integration on international marketing http://youtu.be/sO75ZsvMkc8 YouTube clip on history of EU http://youtu.be/sO75ZsvMkc8

2. The political economy -  refers to idea international business is influenced by economic & political/legal environments of countries Republic - country with democratic process which elects representatives to govern country Ex) the US, France, South Africa, Haiti https://www.cia.gov/library/publications/the- world-factbook/fields/2128.html#gmhttps://www.cia.gov/library/publications/the- world-factbook/fields/2128.html#gm for listing of government types

3. Economic systems  Governs how country controls production, distribution, & consumption of goods & services.  US-EU conflict activity  http://www.ustr.gov/countries-regions/europe-middle- east/europe/european-union http://www.ustr.gov/countries-regions/europe-middle- east/europe/european-union  Review the link and list the points of contention in trade between the US and EU. Also how does each bloc benefit each other – Create in a PPT format and present to the class

4. Economic systems (con’t)  Market economy - free market answers 3 economic questions Private property & entrepreneurship are characteristics. Have little government involvement. Do not exist in pure form, considered theoretical.

5. Economic systems (con’t)  Mixed economy - system combines market economy characteristics with varying levels of government control. Most developed countries are mixed  Ex) US, Canada, Germany, Japan, etc. Government control mostly to protect consumers & businesses. Socialism - strong form of mixed economy  Sets strong rules & regulations to control businesses practices.  Aims to protect all citizens.

6. Economic systems (con’t)  Planned or Command economy - government acts a central planner and answers three economic questions. Former Soviet planned economies in Central and Eastern Europe collapsed. China has moved some products towards market-based; many large industries controlled by state. Ex) North Korea, Cuba, Vietnam, and Laos

7. Economic systems (con’t)  Traditional economy - customs, religious beliefs, & historical patterns determine answers to 3 economic questions. Ex) Amish, Aborigines, & Amazon tribes http://youtu.be/csYN5qBXZBUhttp://youtu.be/csYN5qBXZBU YouTube clip on types of economic systems

8. International marketers need different sales strategies based on economic system  Many companies cautious about selling in Chinese market due to weak government controls over patents & competitive practices. Chinese companies known to steal product designs & packaging. Minimal regulations on workers safety or environment. Allows for lower production costs.

9. General trend  Last 15 years has been toward market- based or mixed market economic systems.  Economic systems benefit from international marketers serving as key tool in meeting needs of country.

10. Economic integration  Refers to development of trading partnerships with elimination of trade restrictions.  Free Trade Area (FTA)- all barriers removed Customs union - FTA with common trade policy to non-members.  Ex) European Union & Turkey since 1996

11. Economic integration (con’t) FTA (con’t) – Common market - customs union that allows labor, capital & technology to move between members European Union, an economic union, coordinates economic policies between 27 member countries http://www.youtube.com/watch?v=VvIPSY_Sbfg US-EU conflict activity** http://www.ustr.gov/countries-regions/europe-middle- east/europe/european-union http://www.ustr.gov/countries-regions/europe-middle- east/europe/european-union Review the link and list the points of contention in trade between the US and EU. Also how does each bloc benefit each other – Create in a PPT format and present to the class

12. Regional trade agreements  ASEAN - Association of Southeast Asian Nations  COMESA - Common market for East & Southern Africa  CACM - Central American Common Market  CARICOM - Caribbean Community & Common Market

13. Regional trade agreements (con’t)  The more integrated the region, fewer variances needed in product development.  A standardized set of rules & regulations brings down cost of product development & sales.  BONUS ACTIVITY!!  Find 3 interesting facts…dig deep!!!  http://www.stoptheftaa.org/ http://www.stoptheftaa.org/  http://www.globalexchange.org/campaigns/ftaa http://www.globalexchange.org/campaigns/ftaa

14. The Americas  NAFTA - North American Free Trade Agreement with Canada, Mexico & US. Went into effect in 1994. Eliminated duties on ½ of all US goods shipped to Mexico. Set agreements to phase out all other tariffs in 2008. Protects patents, copyrights, & trademarks. Eases investments between three countries Set rules related to worker and environmental protections. Is controversial; is viewed as cause of job losses in US.

15. The Americas (con’t)  CAFTA - Central America Free Trade Agreement with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Dominican Republic & the US. Went into effect in 2005. 80 % of U.S. consumer & industrial goods exports no longer subject to tariffs. Tariffs on rest of products phased out over ten years by 2015.

16. The Americas (con’t)  FTAA - Free Trade Area of Americas will include all countries in Americas except Cuba Was to be enacted in 2005, but lacked support of proposed member governments & citizens http://www.youtube.com/watch?v=VmHiICjcp6g &playnext=1&list=PL0CFBDB0CCA8C4AC8 http://www.youtube.com/watch?v=VmHiICjcp6g &playnext=1&list=PL0CFBDB0CCA8C4AC8 YouTube clip on FTAA