Gross Domestic Product:
To explain in simple words, the statistic used to measure the economy of a country is GDP – Gross Domestic Product. For Example: The U.S. economy, as measured by GDP, is everything produced by all the people and all the companies in the U.S. It represents the total dollar value of all goods and services produced over a specific time period.
Usually, GDP is expressed as a comparison to the previous quarter or year. For example, if the year-to-year GDP is up 3%, this is thought to mean that the economy has grown by 3% over the last year.
THE ECONOMIC ENVIRONMENT: CHAPTER 4
The Economic Environment can be defined as a ‘totality of economic factors, such as employment,income, inflation,interest rates, productivity, and wealth, that influence the buying behavior of consumers and firms’.
There are few countries who are major exporters of almost all kinds of goods. Likewise, India, China, Taiwan, Vietnam, Thailand, Indonesia, is the main Exporting countries in the world.
However, France, Germany, Italy, Great Britain, Japan, United States, Canada, Russia are considered to be Major Industrialized countries of the world. Such countries are expected to have highly developed economies and be democracies.
ECONOMIC INTEGRATION:
Economic Integration is a term used to describe how different aspects between economies are integrated. As economic integration increases, the barriers of trade between markets diminish. The most integrated economy today, between independent nations, is the European Union and its Euro Zone.
The European Union (EU) is an economic and political union of 27 member states, located primarily in Europe.
Euro Zone consists of 16 European Union (EU) states which have adopted the euro as their sole legal tender. It currently consists of Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.
The Free Trade Area of the Americas (FTAA) was a proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas but Cuba. The proposed agreement was an extension of the North American Free Trade Agreement (NAFTA) between Canada, Mexico and the United States. Against the market are positioned Cuba, Venezuela and later Bolivia, Ecuador, Dominica, Nicaragua and Honduras, which entered the Bolivarian Alternative for the Americas in response, and not strongly opposing but not supporting Argentina, Chile and Brazil.
The Free Trade Area of the Americas (FTAA), which was being negotiated by 34 countries of the Americas, was intended to be the most far-reaching trade agreement in history. Although it was based on the model of the North American Free Trade Agreement (NAFTA), it went far beyond NAFTA in its scope and power.
The FTAA would have introduced into the Western Hemisphere all the disciplines of the proposed services agreement of the World Trade Organization (WTO) - the General Agreement on Trade in Services (GATS) - with the powers of the failed Multilateral Agreement on Investment (MAI), to create a new trade powerhouse with sweeping new authority over the Americas.
NORTH AMERICAN INTEGRATION:
In 1994, the North American Free Trade Agreement (NAFTA) joined the economic futures of Canada, Mexico, and the United States, with systematic rules governing trade and investment, dispute resolution, and economic relations. However, economic integration among the three countries extends considerably beyond trade and investment. The NAFTA agreement takes a very narrow view of integration, barely addressing such vital issues as immigration policy and labor markets, the energy sector, environmental protection, and law enforcement. NAFTA created the world’s largest Free Market - $ 390 million US, Canada and Mexican consumers and a total output of $ 10 trillion.
INTEGRATION IN ASIA:
Association of South East Asian Nations (ASEAN).
East Asia Economic Group.
Asia-Pacific Economic Cooperation (APEC).
South Asian Association for Regional Cooperation (SAARC).
INTEGRATION IN AFRICA & THE MIDDLE EAST:
THE POLITICAL AND LEGAL ENVIRONMENT: CHAPTER 5
Political Systems:
Individualism
Democratic
Collectivism
Totalitarian.
There are at least four major dimensions of a country's political environment of concern to the International Business:
1. The political system and ideology
2. The role of government in the economy
3. Political instability
4. The country's international political relationships.
Legal Systems: Rules or Laws that regulate behavior.
Property Rights
Private action
Public action.
The legal environment for protecting information is developing slowly along with the adoption of IT.
EXPORT CONTROL – US EXPORT CONTROL SYSTEMS:
Export Administration Act.
Munitions Control Act.
Determinants for Export Controls: National Security, Foreign Policy, Nuclear non proliferation.
Dual use items:
a. Goods used for both military and civilian.
b. Controlled for other purposes.
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