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TheGlobalEnvironmentofInternationalMarketingChapter2ChapterLearningObjectives1.TheimportanceofGATTandtheWorldTradeOrganization2.TheemergenceoftheInternationalMonetaryFundandtheWorldBankGroup3.TheevolutionoftheEuropeanCommunitytotheEuropeanUnion4.ThetradelinkageofNAFTAandSouthAmericaanditsregionaleffectsChapterLearningObjectives5.ThedevelopmentoftradewithintheAsia-PacificRim6.ThegrowthofdevelopingmarketsandtheirimportancetoregionaltradeGeneralAgreementonTariffsandTrade(GATT)p.27-9GATTcreatedasanagencytoserveaswatchdogoverworldtradeandprovideaprocesstoreducetariffsGATTalsoprovidedamechanismtoresolvetradedisputesbilaterallyGATTcoversthreebasicareas:tradeshallbeconductedonanondiscriminatorybasis;protectionshallbeaffordeddomesticindustriesthroughcustomstariffs,notthroughsuchcommercialmeasuresasimportquotas;andconsultationshallbetheprimarymethodusedtosolveglobaltradeproblems.3. GATTnowreplacedbytheWorldTradeOrganizationWorldTradeOrganization(WTO)Itsetsmanyrulesgoverningtradebetweenits132membersWTOprovidesapanelofexpertstohearandruleontradedisputesbetweenmembers,and,unlikeGATT,issuesbindingdecisionsp.29UnlikeGATT, isaninstitution,notanagreementTheInternationalMonetaryFund(IMF)IMFwascreatedtoassistnationsinbecomingandremainingeconomicallyviable(p.31-2)ItassistscountriesthatseekcapitalforeconomicdevelopmentandrestructuringIMFloanscomewithstipulationsthatborrowingcountriesslashspendingandimposecontrolstocurbinflationIthelpsmaintainstabilityintheworldfinancialmarketsObjectivesoftheIMFinclude:stabilizationofforeignexchangeratesestablishconvertiblecurrenciestofacilitateinternationaltradelendmoneytomembersinfinancialtroubleWorldBankGroup(WBG)ThefunctionsoftheWBGinclude:p.31-2ThegoalofWBGistoreducepovertyandtheimprovementoflivingstandardsbypromotingsustainablegrowthandinvestmentinpeople.lendingmoneytocountriestofinancedevelopmentprojectsineducation,health,andinfrastructure;providingassistanceforprojectstothepoorestdevelopingcountries;lendingdirectlytotheprivatesectorindevelopingcountrieswithlong-termloans,equityinvestments,andotherfinancialassistance;provideinvestorswithinvestmentguaranteesagainst“noncommercialrisk,”sodevelopingcountrieswillattractFDI;andprovideconciliationandarbitrationofdisputesbetweengovernmentsandforeigninvestorsProtestsAgainstGlobalInstitutionsIn1999“anti-capitalistprotestors”complainedagainsttheWTO,andIMF,overtheunintendedconsequencesofglobalizationthatinclude:environmentalconcernsworkerexploitationanddomesticjoblossesculturalextinctionhigheroilprices,anddiminishedsovereigntyofnationsGlobalMarketsandMultinationalMarketGroupsTheglobalizationofmarketsTherestructuringofEasternEuropeintoindependentmarket-driveneconomiesThedissolutionoftheSovietUnionintoindependentstatesandTheworldwidetrendtowardeconomiccooperationManyMultinationalMarketGroupshaveemergedduetorecenttrendsthatinclude:p.32VariousexamplesofMultinationalMarketGroupsareprovidednextNorthAmericanFree-TradeArea(NAFTA)CanadaUnitedStatesMexicoNAFTARulesofOriginTariffshiftruleNon-NAFTAimportsundergosufficientmanufactureorprocessingtobecomeproductsthatcanqualifyunderadifferenttariffclassification.Value-contentruleAsetpercentageofthevalueofthegoodmustbeNorthAmerican(usuallycoupledwithatariffclassificationshiftrequirement).Somegoodsaresubjecttothevalue-contentruleonlywhentheyfailtopassthetariffclassificationtestbecauseofnon-NAFTAinputs.AssociationofSoutheastAsianNations(ASEAN)+3BruneiIndonesiaLaosMalaysiaMyanmarPhilippinesSingaporeThailandVietnamJapanS.KoreaChinaEconomicCooperationOrganization(ECO)PakistanIranTurkeyAzerbaijanTurkmenistanUzbekistanAsia-PacificEconomicCooperation(APEC)AustraliaBruneiCanadaChileChinaHongKongIndonesiaJapanSouthKoreaMalaysiaMexicoNewZealandPapuaNewGuineaPeruPhilippinesRussiaSingaporeTaiwanThailandU.S.A.Vietnam?2004TheMcGraw-HillCompanies,Inc.Allrightsreserved.MarketinginaDevelopingCountryAmarketercannotsuperimposeasophisticatedmarketingstrategyonanunderdevelopedeconomyInevaluatingthepotentialinadevelopingcountry,themarketermustmakeanassessmentoftheexistinglevelofmarketdevelopmentwithinthecountryThelevelofmarketdevelopmentroughlyparallelsthestagesofeconomicdevelopmentAscountriesdevelop,thedistributionandchannelsystemsdevelopandmom-and-popstoresgivewaytolargerestablishmentsAdvertisingagencies,facilitiesformarketingresearch,repairservices,specializedconsumer-financingagencies,andstorageandwarehousingfacilitiesarefacilitatingagenciescreatedtoservetheparticularneedsofexpandedmarketsandeconomiesStrategicImplicationsforMarketingAsacountrydevelops,incomeschange,populationconcentrationsshift,expectationsforabetterlifeadjusttohigherstandards,newinfrastructuresevolve,andsocialcapitalinvestmentsaremadeMarketbehaviorchangesandeventuallygroupsofconsumerswithcommontastesandneeds(i.e.,mark

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