International Business

9.1 Importance of International Business

• GOALS
• Describe the nature, growth, and importance of international trade and investment.
• Explain the reasons for the growth of international business.

The Scope of International Business

International business: business activities that occur between two or more countries

Extent of international trade

• Started in 1600, British East India Company
• Page 223 Business Examples
• American Companies-McDonald's, General Motors, IBM, Coca-Cola, Apple

U.S. Trading Partners

• World trading exceeds $12 trillion
• Exports vs. Imports Page 223
• Why?

Trade, investment, and the economy

• Foreign investment occurs when firms of one country build new plants and facilities or buy existing businesses in another country
• Exceeded $340 billion

The numbers

• America sold over $1.8 trillion goods/services to foreign customers
• 20% of all jobs depend on foreign trade
• 5% of works are employed by foreign businesses working in the U.S.
• Page 224

why is international trade important to the Us?

Reasons for Growth in

Profit

• Lower cost of making goods
• Sell at a higher price

Factors that Help Firms Engage in

World trade organization WTO:

• International organization that creates and enforces the rules governing trade among countries

Trading bloc:

• Group of 2 or more countries that agree to remove all restrictions between them on the sales of goods/services
• Keeps barriers on other countries

European Union EU:

• A trading block between 27 countries page 226
• Euro created in 1999 to have 1 currency

North American Free Trade Agreement NAFTA:

• 1989-Canada
• 1992-Added Mexico
• Removed tariffs and other barriers to trading

International business

• is regulated by 2 institutions
• 1. International Monetary Fund (IMF)
• 2. World Bank
• Both help with loans

Why has there been growth in international busines

Assignment: