DOING
BUSINESS IN
INTERNATIONAL
AGREEMENT
MONDAYS
5PM-8PM
PROF. CAITHLYN KYLE R. JUAYONG, MBA
Learning objectives:
I. To understand the general
knowledge about the
international agreements;
ii. To identify the processes in
doing business in international
agreement;
ii. To explain the meaning of the
international business trade.
What in business
in international
agreement?
MENTIMETER CODE:
87 24 95 4
Definition of terms
International Agreement - are formal understandings or
commitments between two or more countries. instrument by
which states and other subjects of international law.
International law - the body of legal rules, norms, and
standards that apply between sovereign states and other
entities that are legally recognized as international actors.
International trade - the exchange of goods and services
between countries.
Definition of terms
International trade law - rules and customs governing trade
between countries.
Tariff - a tax imposed by one country on the goods and
services imported from another country.
BUSINESS IN
INTERNATIONAL
AGREEMENT
Trade agreements regulate
international trade between two or
more nations. An agreement may
cover all imports and exports, certain
categories of goods, or a single
category.
19th Century: The broader concept of the
integration of economies and societies evolved
HISTORY
1870: Began first phase of Globalization
1913: GDP was 22.1
After 1913: Increased Trade Barriers to Protect
Domestic Production
1919: World War I: End of the first phase of
Globalization, the Industrial Revolution in the UK,
Germany and the USA
A sharp increase in the trade with import and
export by colonial empires
HISTORY 1930’s: Declined Trade Ratio, GDP was 9.1
After the 1930s: World Nations felt the need for
International Co-operation in global trade
and balance of payments affairs
Establishment of IMF and IBRD (World Bank)
IMF: International Monetary Fund
IBRD: International Bank for Reconstruction
and Development
1947: 23 countries conducted negotiations in
order to prevent the protectionist policies and
to revive the economies from recession
aiming at the establishment of the World
Trade organization
HISTORY 1947: Establishment of GATT (General
Agreement on Trade and Tariffs)
The 1980s: efforts to convert GATT into
WTO
1995: GATT was replaced by WTO (World
Trade Organization) on Jan 1, 1995
Trade Liberalization
1990 – 2000: The Term International
Business (IB) has emerged from the term
International Marketing.
HISTORY
Two Phases of the Evolution of
International Business
There are two Phases of the evolution of
the term International Business
1. International Trade to International
Marketing
2. International Marketing to
International Business
After 1990: Rapid Internationalization add
globalization
BRIEF BACKGROUND
INTERNATIONAL TRADE LAW
governs the way in which countries may restrict or
regulate trade in goods and services.
International trade was key to the rise of the global
economy. In the global economy, supply and
demand—and thus prices—both impact and are
impacted by global events.
Understanding International Trade
IMPORTS EXPORTS
a product
A product
that is
that is sold to
bought from
the global
the global
market.
market.
Understanding International Trade
FREE-TRADE PROTECTIONISM
policy of protecting
An agreement is a domestic industries
pact between two against foreign
competition by means of
or more nations to
tariffs, subsidies, import
reduce barriers to quotas, or other
imports and exports restrictions or handicaps
among them. placed on the imports of
foreign competitors.
Export Restrictions
Some products are subject to export
restrictions.
Exports to some countries may be
restricted.
Export sales to some purchasers may be
restricted.
Import Restrictions
special taxes known as "duties"
Four factors of duties:
1. Classification under the Harmonized Tariff
Schedule.
2. The product's country of origin.
3. Status of entry.
4. Product value.
Agencies that govern International agreements
GATT (1948-1993)
General Agreement on Tariffs and Trade
an international agreement, i.e. a
document setting out the rules for
conducting international trade, and
an international organization created
later to support the agreement.
Agencies that govern International agreements
WTO (1995-PRESENT)
World Trade Organization
with the purpose of supervising and
liberalizing international trade.
monitors trade in services and trade-related
aspects of intellectual property rights, in
addition to trade in goods.
Agencies that govern International agreements
UNCITRAL (1966-PRESENT)
United Nations Commission on
International Trade Law
principal legal body of the United Nations
system in the field of international trade law.
works to unify and harmonize the rules of
international trade.
Contracts for the Sale
or Purchase of Goods
PAYMENT
Exporters should protect themselves
against the risk of non-payment by the
foreign buyer because of the difficulty of
collection in a foreign land.
CURRENCY
Most sellers price their products in dollars.
Contracts for the Sale
or Purchase of Goods
CISG
Most of the major developed countries have ratified the U.N.
Convention on Contracts for the International Sale of Goods (CISG).
INCOTERMS
Most sellers The International Chamber of Commerce has developed
shorthand trade terms called INCOTERMS that operate to:
1. Assign risk among the parties.
2. Identify which party is responsible for the various stages of shipment
Contracts for the Sale
or Purchase of Goods
DISPUTE RESOLUTION
Every agreement for the sale or purchase of goods, but
especially agreements dealing with transnational
transactions, should prescribe how disputes will be
handled.
Joint Ventures and Direct
Investment.
Overseas investment may take the
form of a joint venture relationship,
a foreign subsidiary, or licensing
arrangements. There are complex
tax, legal, and business issues that
should be addressed when
planning any such activity.
