OTHER THEORIES OF The modern version of the Ricardian model

assumes that owners (countries) of factors

INTERNATIONAL TRADE
of production for products that are in
demand would receive an increasing part of
Introduction the world's global income.
• Before 2000, the US was the top global
trade partner, with over 80% of countries The SF model is sometimes referred to as
trading more with it than China. By 2018, the Ricardo-Viner model.
this dropped to 30% as China became the
leading partner for 128 countries. By 2020, There are at least two reasons why trade
China held a 15% share in global trade, has an important influence upon the
ranking third behind the EU and US. income distribution:
Despite global economic challenges and
criticism over COVID-19, China maintained - A. Resources (factors of production:
a trade surplus of USD 535.37 billion, land, labor, and capital) cannot be
showing strong trade growth. transferred immediately and without
costs from one industry to another.
• In January 1998, French monthly Le
Monde Diplomatique carried out an article - B. Industries use different factors, and
titled "China holds world trade hostage." Set a change in the production mix a country
in the backdrop of the 1997 Financial Crisis, offers will reduce the demand for some
the article by Stephen S. Cohen postulated of the production factors and increase
that China, "stripped of its old ideology," was the demand for other production factors.
bent on "asserting itself as a world power in - Paul Samuelson and Ronald Jones, two
every domain." American economists, elaborated the SF
model based on specific factors, which are,
• The Centre of Strategic and International in fact, the factors of production - land,
Studies, in this context, has urged for labor, and capital.
international players to "push back against - Jones and Samuelson decided to call
Chinese economic coercion," including in these factors territory or terrain (T) (terra
Trade relations. means land), labor (L), and capital (K).
- Jones and Samuelson say that products
The Specific Factor Model like food (X) are made by using territory (T)
What is the Specific Factor Model? and labor (L), while manufactured products
use capital (K) and labor (L).
The specific factor (SF) model was originally - Labor (L) is a mobile factor, one that can
advanced by Jacob Viner and is a variant of be used in both food and manufactured
the Ricardian model. The Ricardian model products.
of trade was developed by English political - Territory and capital are specific factors,
economist David Ricardo in his magnum territory (T) is used only for food and capital
opus On the Principles of Political Economy is used only for manufactured products.
and Taxation (1817). It is the first formal
model of international trade. When labor moves from food to
manufactured product, food production falls

0
while output of the manufactured product - C - Consumption
rises. The shape of the production function - I - Investment gross government spending
reflects the law of diminishing marginal - NX - Net Export
returns. - personal consumption expenditures C -
Consumption
The law of diminishing marginal returns is a - gross private domestic investment I –
theory in economics that predicts that after Investment
some optimal level of capacity is reached, - gross government spending G -
adding an additional factor of production will Government Spending
actually result in smaller increases in output. - ➢• Net exports are a measure of a
nation's total trade. The formula for net
where: exports is a simple one: the value of a
nation's total export of goods and services
- LMP = labor used for production of minus the value of all the goods and
manufactured product services it imports.
- LF = labor used for production of food
- The standard trade model is a general
Therefore, a country rich in capital and poor model that includes the Ricardian model,
in land tends to produce more manufactured the Ronald Jones and Paul Samuelson
products than food products, whatever the specific factors model, and the
price. A country rich in land (territory), like Heckscher-Ohlin (H-O) model as special
most agricultural countries, tends to cases -two goods, food (F) and cloth (C)
produce more food. Each country's production possibility frontier
(PPF) is a smooth curve.
Standard Model of Trade
What is Standard Model of Trade? The model assumes the following:
1. Each country produces two goods,
The standard model of trade (Paul food (F) and cloth (C).
Krugman-Maurice Obstfeld model) implies 2. Each country's production possibility
the existence of the relative global demand frontier (PPF) is a smooth curve (TT).
curve resulting from the different 3. The point on is PF, at which an
preferences for a certain good and relative economy actually produces, depends on
global supply curve resulting from the the price of cloth relative to food, PC/PF.
different production possibilities. 4. Isovalue lines are lines along which
the market value of output is constant.
- Global demand is the key category in
macroeconomics. Global demand or total - A country's PPF determines its relative
demand refers to the amount of money, supply function because it shows what the
which subjects (consumers) of an economy country is capable of producing, which
plan to spend on goods and services at the should be maximized. As we have stated,
different size of income or at given prices in the equilibrium is the intersection of the
a given period. demand and supply curves. What a country
- Total demand consists of: produces depends on the relative price of
cloth to food (PC/PF). An economy chooses

1
its production of cloth QC and food QF to a particular resource should be exporting
maximize the value of its output (V) given products that will use that resource and
the prices of cloth and food. import products made from resources that
the country lacks.
where:
- The first serious attempt to test the H-O
- V = value of output theory was made by Russian-born
- PC= price of cloth American economist Wassily W. Leontief in
- QC= quantity of food 1953 when he studied the US economy
- QF= quantity of food closely. The H-O theory predicts that the US
- The standard trade model is built on four would export more capital-intensive goods
key relationships: and import labor-intensive goods. However,
Leontief was surprised to discover that the
1. The relationship between the PPF and US was actually exporting labor-intensive
the world relative supply (RS) cune goods and importing capital-intensive
2. The relationship between relative prices goods. His analysis became known as the
(RP) and relative demand (RD) Leontief paradox.
3. The world equilibrium as determined by
world RS and RD; and - The Leontief paradox showed that in the
4. How changes in the terms of trade affect international division of labor, the US
a nation's welfare. specialized in labor-intensive rather than
capital-intensive goods.
The world relative supply curve (RS) is
upward sloping because an increase in the - A paradox is a seemingly absurd or
price of cloth/price of food (PC/PF) leads self-contradictory statement or proposition
both countries to produce more cloth and that when investigated or explained may
less food. prove to be well-founded or true.

Toms of trade (TOT) means the price of a - Wassily Leontief received a Nobel prize in
country's exports divided by a country's 1973 for his contribution to the input-output
imports: analysis. Three of his students, Paul
Samuelson (specific factor model), Robert
where: Solow, and Vernon Smith also received
Nobel prizes. He also aggregated factors
- • Generally, a rise in the TOT increases a into: two categories: LABOR & CAPITAL
country's welfare, while a decline in the TOT
reduces its welfare. Intuitively, if TOT falls, - Boris Swerling (1953) complained that
the price of what a country produces goes 1947 was not a typical year: the postwar
down relative to the price of what the disorganization of production overseas was
country consumes. not corrected by that time.

Leontief Paradox - In 1961, Stolper and Roskamp applied

- According to the Heckscher-Ohlin theory Leontiers method to the trade pattern of
(factor proportions theory), a country rich in

2
East Germany (EG). Wahl studied Canada's process of bringing a product or service to
trade pattern. market.
- In 1962, Bharawaj studied India's trade
pattern. THE MARKETING MIX 4P'S
- In 1975, Hong analyzed Korea's trade PRODUCT - the commodity or good
pattern. produced or manufactured to satisfy the
wants and needs of customers.
NATURE AND SCOPE OF
- TANGIBLE (goods)
INTERNATIONAL MARKETING
- INTANGIBLE (services)

INTRODUCTION
PRICE - the product is basically the amount
that customers pay so they can have it.
INTERNATIONAL MARKETING GROUP
(IMG)
ECONOMIES OF SCALE help to reduce
- A pioneering global company that serves
cost and, consequently, the price of the
as an avenue toward the ease of financial
product.
security.
- Caters to the financial needs of every
THE MARKETING MIX 4P'S
individual and families who wish to access
financial independence.
PLACE - moving products from the
- Collaborated with the world's top-tier
producer to the intended consumer.
financial services firms.
HOW refers to the distribution channel, a
- Promoting financial literacy, teaching every
reliable combination of intermediaries such
individual from being a spender to becoming
as distributors, wholesalers, and retailers.
a saver.
WHERE is the location where the products
should be positioned and distributed that is
Its MISSION is to help create wealth for
easily accessible to the targeted customers.
families to give right business concepts,
PROMOTION - a marketing communication
services, and products.
process that helps the company to acquaint
the customers with the product and
The VISION is to build a new financial
publicize it and its features to the public.
industry, where everyone is able to earn
what the wealthy are earning by bringing the
THE EXTENDED 7P'S
secrets of the wealth to all.
PEOPLE
INTERNATIONAL MARKETING - the
- The most important resource of a
application of marketing principles to satisfy
company as the company's success
the varied needs and wants of different
depends, to a large extent, on the quality of
peoples residing across the national
its people.
borders.
- It is important to select, hire, train, and
compensate the right people to deliver
MARKETING MIX - a general phrase used
superior service to the clients, whether they
to describe the different kinds of choices
run a support desk, handle customer
organizations have to make during the

3
service, do accounting job, perform PROCESS
copywriting, and does programming among C. DIRECT ACTIVITIES
others. - These are the actual distribution and sales
to customers and the reactions of the
PHYSICAL EVIDENCE customers as they get to try the product and
- People often make decisions based on how the company feels about what the
what they see and feel. The physical customers have said.
environment of an office says a lot about D. INDIRECT ACTIVITIES
what the company is trying to offer. The - These are the support that happen before,
physical evidence element of the marketing during, or after the service has been given,
mix refers to the physical environment which may even last for a lifetime.
experienced by the customer.
- BRANDING - Branding means that MARKET SEGMENTATION
when people hear the name of the company TARGET MARKET - is the practice of
or of the products and services that a dividing the entire market into groups,
company offers, a logo or image of the creating subsets of a market based on
brand would easily come to mind. demography, needs, priorities, common
interest, and other psychographic or
PROCESS behavioral criteria used to better understand
Refers to the flow of activities or mechanism the target market.
that takes place when there is in an - It consists of the groups of buyers to whom
interaction between the customers and the the company wants to sell the product.
business. An ideal process should be taking
the least amount of time amongst all the MARKET POSITIONING - is a strategic tool
available options and should cost less to the used to establish the image of a brand or
company while delivering an efficient output product in the minds of the consumer.
to the maximum of its capacity.
PRODUCT
A. ELECTRONIC PROCESSES PRODUCT DIFFERENTIATION
- These include the use of barcodes, - It is a commodity or good produced or
receipts, and other forms or graphics or manufactured to satisfy the needs and
logos, and the information about a product wants of customers. The product can be
or a company that comes with them. These tangible(goods) or intangible(services) the
may also include the use of those codes service rendered by a service company is
that one can scan using an app on a mobile its products.
phone. - Strategy helps companies build brand
B. TECHNOLOGICAL PROCESS image and value. It is important to do
- These are the creation of products that are extensive research before developing a
tangible that customers could really feel and product as products have to satisfy
own. Not only should the manufacturer customer demand and products have their
create products that the customers need, own product as cycle.
but also what the customers want.

4
REASON WHY MANY BUSINESSES ARE advantage. However, being first on the
JUMPING ON THE GLOBAL scene need to be accompanied by better
products/services, solid capital investment,
BANDWAGON - TO CAPITALIZE ON THE and effective company performance.
POTENTIAL OF TREMENDOUS 7. CREATE ECONOMIES OF SCALE IN
GROWTH: PRODUCTION
- Economies of scale (mass production)
EXPORT occur when the unit costs of a product
1. INCREASE SALES AND production declines as a production volume
PROFITABILITY - Going global can provide increases. Because economies of scale
new sources of revenue, yield greater mean lowering per unit.
returns on investments (ROI), and secure 8. EXPLORE UNTAPPED MARKETS WITH
long-term success for a business. THE POWER OF THE INTERNET
2. ENTER NEW MARKETS - It is important - This situation where there is a desire a
to study which market wants the company's certain for product or service, but nobody is
products and that is where the company has yet providing it.
to go, no matter how far that is. It is 9. MAKE USE OF EXCESS CAPACITY
important to be sure that that place offers - This is where company manufacturer
opportunity for the company, one that is seasonal products. sell or Companies not
easy to enter, one where buyers desire the only connect with people from all over the
product. world, but also have a chance to meet them
3. CREATE JOBS - Hiring people and in person to grow the business
creating jobs makes a country stronger, thus 10. TRAVEL TO NEW
creating a higher standard of living for its 11. SHARING OF COST AND RISK
people. As the company produces more to BETWEEN MARKET
support the extra demand for its product in 12. EXTENDING A PRODUCT'S LIFE
the international market, more people are CYCLE.
needed locally to support the growth. - in the domestic market, a product may be
4. OFFSET SLOW GROWTH IN THE near the end of its life cycle, but it can be at
HOME MARKET - Entering new markets its growth stage abroad.
overseas allows companies to decrease - Cost is tied to the concept of risk. This
their dependency on their local market. A contributes to having a larger market share
poorly performing product in domestic and earning greater profits.
markets may also be offset by introducing it 13. TAKE ADVANTAGE OF A LESS
in another country. COMPETITIVE MARKET.
5. OUTMANEUVERED COMPETITORS 14. UTILIZE EXCESS CAPACITY
6. ENLARGED THE CUSTOMER BASE - other than off-season excess capacity,
- Enlarge the customer base this will need some companies have really big capacities
hiring more people to do the job and and may have excess capacity that can
increase the number of customers a support going international.
company has. - for some product lines, local competition
- "First-mover advantage" offers a company maybe so intense. Therefore, they go the
a competitive advantage because being first foreign markets, where competition may be
in a particular market gives a company an less intense.

5
15. TAKING ADVANTAGE OF 5. TRANSITION TO MARKET
GEOGRAPHICAL DIVERSIFICATION - for ECONOMIES
some companies, geographical - Leads to economic development and
diversification (going international) maybe a prosperity as in the case of the Soviet
more desirable alternative than product line Union.
diversification (manufacturing or dealing 6. CONVERGING CONSUMER NEEDS
with several products). This is, in fact, less - Dictate international business participants
costly. on what to produce and sell in the
16. TAKING ADVANTAGE OF THE international environment.
DEMAND ABROAD - sometimes, a product
may be available in one country only, while PESTEL ANALYSIS
several countries require the same product. - A useful scanning tool, identifies the
relevant political, economic, sociocultural,
FACTORS AFFECTING INTERNATIONAL technological, legal, and environmental
TRADE factors from the external environment that
1. EMERGING REGIONAL ECONOMIC are to be dealt with by international
AND POLITICAL INTEGRATION marketers.
- Consistent with free trade economic
theory, it revolves around the trade FACTORS REPRESENT TREATS OR
agreement/treaties between countries that OPPORTUNITY AND CHALLENGES
usually include elimination of trade barriers 1. POLITICAL
and aligning monetary and fiscal policies - Political factors such as changes in tax
leading to a more interconnected global rates, policies and actions of government,
economy. political stability of a country, and foreign
2. ENHANCEMENT IN TECHNOLOGY trade regulations among others affect
- Technological advances are a driving force international marketing. The internal affairs
for development as they make consumers of a country that affect the economy of the
worldwide aware of products,services, and country participating in international
entertainment. marketing are considered as domestic
3. IMPROVEMENT IN TRANSPORTATION factors.
AND TELECOMMUNICATION 2. ECONOMIC
- Efficient transportation due to - Economic factors relate to the economic
containerization and just-in-time(JIT) system of the country where a company
technology are creating more international operates. Customer behavior and attitude
business opportunities. Lower cost and and their purchase demands are often
higher quality communication, like email and linked to their economic/financial status.
teleconferencing due to satellite technology 3. SOCIOCULTURAL
have increased business opportunities - Social factors concern people.
globally and internationally. Organizations are made up of people.
4. WORLD ECONOMIC GROWTH People and organizations have their own
- international business and trade stimulates culture. Therefore, sociocultural factors
long-term world economic growth through affect international marketing.
multiple channels.

6
4. TECHNOLOGICAL - Bargaining power of suppliers- number of
- Technological factors refer to suppliers is low.
advancement in technology. New products 9. STRUCTURE OF DISTRIBUTION
and services are possible nowadays - links between sellers and buyers.
because of new technologies, which 10. GEOGRAPHY
increase revenues and profits. - is the study of the physical features and
5. LEGAL environment of the earth and its
- Adjunct to the political factor is the legal atmosphere.
factor. Governments have long intervened in
international trade through a variety of LEVELS OF INTERNATIONAL
mechanisms, one of which is through their MARKETING
legal system.
6. ENVIRONMENTAL 1. INTERNATIONAL/EXPORT
- When we say environmental factors, we MARKETING
are talking not only about the physical - Based in a single home country
environment, but also about the business - No foreign direct investment in other
and trade environment businesses operate countries.
within and without. - The domestic company either exports to
7. INFRASTRUCTURE foreign firms or buys (imports) from foreign
- refers to all the institutions that help firms.
maintain a healthy economy.
REASONS TO ENGAGE IN THE EXPORT
3 TYPES OF INFRASTRUCTURE INDUSTRY
A. SOFT INFRASTRUCTURE 1. Products in the maturity stage of their
- Refers to all the institutions that help domestic life cycle may find new growth
maintain a healthy economy. Example: opportunities overseas.
health infrastructure, educational 2. Some firms find it less risky and more
infrastructure, political infrastructure. profitable to expand by exporting current
B. HARD INFRASTRUCTURE - covers all products instead of developing new
the physical systems crucial to running a products.
modern, industrialized economy. 3. Firms who face seasonal domestic
C. CRITICAL INFRASTRUCTURE - makes demand may choose to sell their products to
up all the assets that are defined by the foreign markets when those products are "in
government as being crucial to the season" in those foreign markets.
functioning of an economy. 4. Some firms may elect to export products
because there is less competition overseas.
8. COMPETITION
- competitive forces identified factors THREE WAYS OF EXPORTING
present in the competitive market. A. INDIRECT EXPORTING
- Threat of new entrants- new firms enter. - A common practice by going through
- Threat of substitute product- different international marketing intermediaries,
product can be used. companies (could be domestic or foreign)
- Bargaining power of customer- customer who will help the domestic company
apply pressure into vendors. exporter find buyers in the foreign markets.

7
B. SEMI-DIRECT EXPORTING 2. MULTINATIONAL MARKETING
- the company generally establishes an - A. by establishing a DOMESTIC BRANCH
export department to sell directly to a OFFICE or operation
foreign market. The company conducts - B. by establishing a PHILIPPINE
market research, establishes physical REPRESENTATIVE OFFICE
distribution and obtains all necessary export - C. by operating THROUGH A BUSINESS
documentation. ASSOCIATION IN THE PHILIPPINES
C. DIRECT EXPORTING - D. by operating through a local subsidiary
- An exporter initiates the contact through which may be owned entirely or partially by
merchant middlemen, or agents, or the foreign business entry
manufacturers in the home (domestic), - E. by establishing joint venture
where the exporter resides. arrangements with a local corporation
- F. By establishing an affiliate in the
B. SEMI-DIRECT EXPORTING Philippines
- DOMESTIC AGENT INTERMEDIARY-
can act as an exporting department for 3. TRANSNATIONAL MARKETING
several noncompeting firms engaged in - Transnational corporations (TNCs) are a
trading. type of multinational corporation.
- EXPORT ASSOCIATION- which handles - Transnational marketing is the act of
the exporting of the products of the decentralizing and localizing operations
association's members across territories. The goal is to create an
- MANUFACTURER'S EXPORT AGENT- agile environment and greater local
operates very much like the domestic agent penetration, while maintaining some
intermediary, but caters to manufacturing centralized operations for consistency and
firms only. cost saving purposes.
- PIGGYBACK EXPORTING- in which one
manufacturer (carrier) that has export 4. GLOBAL MARKETING
facilities and overseas channels of - It is the highest level of international
distribution handles the exporting of the business activity. a field of study in general
another firm's (rider) noncompeting but business management that markets
complementary products. The carrier does products, solutions, and services to
the exporting for the rider. customers locally, nationally, and
internationally.
C. DIRECT EXPORTING - A Good example of a global business is
- Where the company generally establishes McDonalds
an export department to sell directly to a
foreign market. The company conducts PARTICIPANTS IN INTERNATIONAL
market research, establishes physical MARKETING
distribution and obtains all necessary export
documentation. 1. INDIVIDUALS
- Individuals include households,
workers/employees, managers, and
entrepreneurs.

8
- Individuals, whether in business or acting - Vision is to be a global state trading and
in their personal capacities, can be marketing enterprise in support of the
participants in international marketing development of domestic industries by
whenever they buy anything from another 2022.
country.
2. BUSINESSES Three Important Concepts on IBT
- Businesses could be micro, small, - International - involving more than one
medium, or large, and include even the country
international, multinational, transnational, or - Business - relating to or affecting two or
global companies. more nations
- About one-third of the international trade is - Occupation - principal work; a means of
estimated to be intra-company transfers. earning a living.
- Most trading companies are merchant - Profession - paid occupation; one that
exporters, meaning they export products involves specialized education and formal
manufactured by other firms. qualification and license.
3. GOVERNMENT - Synonyms: foreign, global,
- Governments are participants in intercontinental, world, universal
international marketing when they buy - Trade - buying, selling & exchange of
products, machineries and equipment, goods and services.
services, or when they borrow money - When one trades, he/she is doing
directly or sell bonds and other securities in business.
the foreign capital market. - Buying & selling is also called
4. NOT-FOR-PROFIT ORGANIZATION “merchandising.”
- NGOs include any nonprofit, voluntary
citizens' groups that are organized on a Types of Business According to
local, national, or international level. Purpose/Nature
- International NGOs were important in the - Service - a type of enterprise that provides
anti-slavery movement, the movement for services to customers rather than physical
women's suffrage, and movement against products.
child labor. - Trading/Merchandising - promoting and
- NGOs were formed to emphasize selling products, typically focusing on retail
humanitarian issues, developmental aid, strategies, presentation, and inventory
and sustainable development. management to maximize sales.
- Manufacturing - type of business that
transforms raw materials or components
International Business & Trade into finished goods through various
processes, such as assembly, machining, or
Philippine International Trading chemical processing.
Corporation (PITC) - Hybrid Business - combines elements of
- GOCC - the only state trading corporation both service and product-based models,
in the Philippines offering customers a mix of physical goods
- Established on July 21, 1973 through P.D and services.
No. 252

9
Types of Business According to - Importing involves bringing in goods or
Ownership services into a country from abroad for sale.
- Sole Proprietorship - owned by only one 2. Licensing - A contractual agreement
person where the licensor sells the right to use
- Partnership - owned by two or more intellectual property or manufacture a
persons product to the licensee for royalty.
- Corporation - legal entity which is - Royalty - a certain percent of the sales of
separate from its owners; generally owned a product or intellectual property.
by 5 or more persons. 3. Franchising - Contractual agreement in
- Cooperative - a business organization which the franchisor permits the franchisee
owned and operated by a group of to use the business model or brand name
individuals for their mutual benefit. for a fee, to conduct business as an
independent branch of the franchisor.
International Business and Trade 4. Forming Joint Ventures - Joint
- Any activity/endeavor among nations undertaking by two or more parties, which
around the globe involving buying, selling, otherwise retain their distinct identities.
exchanging of goods, services, capital, - A business arrangement in which two or
labor, resources, technology, people, more parties agree to pool their resources
intellectual property and contractual assets, for the purpose of accomplishing a specific
or any situation where the production of task or project. (e.g. Universal Robina & HK
goods or services crosses country borders. Vitasoy Group, Sony & Honda)
5. Establishing a Branch - Maintaining an
Triple Bottom Line Theory - An economic office in the foreign country. (should be
theory which believes that companies registered and licensed by SEC).
should commit to focusing as much on 6. Wholly Owned Subsidiary - A company
social and environmental concerns as they whose common stock is 100% owned by
do on profits. the parent company. - (e.g Jollibee Foods
- Instead of one bottom line, there should be Corporation)
THREE: 7. International Investing - Selecting
- Profit/Economy global financial instruments as part of a
- People/Society geographically diversified portfolio to spread
- Planet/Environment investment risk. (buying financial
instruments, direct investments)
Corporate Social Responsibility (CSR) - Foreign Direct Investment - a firm that
- A business’ obligation to society and the invests in assets directly into a foreign
environment beyond that prescribed by law country, such as buildings, equipment or
and above and beyond making a profit. organizations.
8. Labor Migration - A resident of one
Major Ways of Doing International country goes to another country to work. -
Business & Trade Philippines is the biggest exporter of labor.
1. Exporting/Importing - Exporting refers
to the process of sending goods or services Globalization - the increasing
from one country to another for sale. connectedness, integration, and

10
interdependence of world culture, Thinking Globally, Acting Locally:
economies, politics, and environment. GLOCALIZATION
Glocalization
2 Interrelated Elements of Globalization - The creation of products or services for the
1. The opening of international borders to global market by adapting them to local
increasingly fast flow of goods, services, cultures and environments.
finance, people, and ideas.
2. The changes in institutions and policies at Glocalization in 2-Level System
national and international levels that 1. Universalization - refers to the process
facilitate or promote such flows. of adapting global ideas, practices, or
products to local contexts while maintaining
Stages of Globalization their core principles.
1. “Globalization 1.0” - started with 2. Particularization - refers to the process
Christopher Columbus’ discovery of the of tailoring global products, ideas, or
New World in 1492. practices to meet the specific cultural,
2. “Globalization 2.0” - from about 1800 to social, and economic needs of a local
2000, and was largely shaped by the context.
emerging power of huge, multinational
corporations. Glocalization in 3-Level System
3. “Globalization 3.0” - from 2000 1. Local (or Subnational) - specific to a
onwards, includes advancements in global particular area, community, or region.
electronic interconnectivity through the 2. National - in relation to a specific nation
internet. or country.
3. Transnational (or International) -
Different Trade Agreements in the extends beyond national borders, involving
Philippines multiple countries or cultures.
1. PJEPA (Philippines-Japan Economic
Partnership Agreement) - first bilateral Reaction/Result of the Interplay of Global
free trade agreement of the Philippines, & Local Forces on Trade
signed by former Pres. Gloria M. Arroyo and 1. Opportunistic Reaction
former Prime Minister Junichiro Koizumi of - Refers to a company's strategic response
Japan, on September 09, 2006. to unexpected opportunities or challenges in
2. EFTA (European Free Trade the global market.
Association) - Philippines, Iceland, - It is where mixed cultures take advantage
Liechtenstein, Norway and Switzerland, of the opportunities provided by
signed a free trade agreement in 2016 international trading.
which took effect on 2018. 2. Rebellious Reaction
3. ASEAN (Association of South East Asian - Refers to a company or organization’s
Nations) - Philippines has a preferential defiance against established norms,
trade agreements with China, Hong Kong, regulations, or competitive practices in the
India, Japan, South Korea, Australia and global market.
New Zealand. - Fostering resistant identity to defend local,
history, traditions and authentic cultures.

11