Article Title:
Author’s Name:
Date Published:
Full Citation:
Section #1 – Summary of article and discussion of the marketing outcome
Section #2 – Application of theory from the text/class to issues in the article
Section #3 – Your opinion about the issue/article
Executive Summaries Portfolio
Current events play an important role in this course. Therefore, you are
encouraged to regularly read articles related to international marketing in
newspapers and (business) magazines, such as The Wall Street Journal, The
Globe and Mail, The Economist, Business Week, Canadian Business, Fortune,
Forbes, and even in publications like Time and Maclean’s.
To structure this effort during the semester, you are required to complete a
portfolio of executive summary briefs of newspaper/magazine articles. This
activity involves reading one article per week (from Sep 17th to Nov 12th - 8
weeks) that is relevant to one of the topics in the course and completing a short
write-up (typed, maximum 1 page, single-spaced) of that article. A summary
brief report template will be handed out in class. A copy of the
newspaper/magazine article should be stapled to each brief. A complete citation
and the source and date of the article should appear at the top of the summary.
For each weekly summary brief, the article summarized must have been
published within 2 weeks of the summary date.
In your brief, you should summarize the article and identify the marketing
outcome (such as the success or failure of the new product or venture). You
should also discuss how the underlying issue relates to one of the marketing
topics discussed in class or in the textbook (i.e., what marketing concepts or text
materials explain the outcome) and include your own opinion on the issue.
The portfolio is due at the beginning of class on Nov 29th. Although the final
product is not due until the end of the semester, the summaries must be
completed on a weekly basis between Sep 17th and Nov 12th. Keep in mind that
the summarized articles must have been published within two weeks of the
summary date.
MKTG 3375
GLOBAL PRODUCTS
1
Basic Product Concepts
• A product is a good, service, or idea
• Product types
✓Industrial goods
✓Consumer goods
–Convenience goods
–Unsought goods
–Shopping goods
–Specialty goods
2
Packaging & Labeling
• Consumer Packaged Goods are a variety of
products whose packaging protects or
contains the product from production to the
end user
➢What roles does packaging serve?
• Labeling provides consumers with various
types of information
➢Regulations differ by country regarding
various products
• Global marketers must understand the
importance of visual aesthetics
3
Branding & Brand Equity
• Bundle of images and experiences in the
customer’s mind
• Brand Equity is the total value that accrues to
a product as a result of investments in the
marketing of the brand
4
Brand Equity Benefits
• Greater loyalty
• Less vulnerability to marketing actions and crises
• Larger margins
• More inelastic consumer response to price
increases
• More elastic consumer response to price
decreases
• Increased marketing communication
effectiveness
5
Branding Strategies
• Multi-branding
• Multi-product (Brand extension)
• Combination or tiered branding
• Co-branding
6
Local versus Global Brands
• Local Brands - Brands that have achieved
success in a single national market
• International Brands - Products and brands
offered in several markets in a particular
region
• Global Products meet the wants and needs of a
global market and are offered in all world
regions
• Global Brands have the same name and similar
image and positioning throughout the world
7
Product/Brand Matrix
8
Country of Origin as a Brand Element
•Perceptions about and attitudes toward
particular countries often extend to
products and brands known to originate
in those countries
9
Exercise
• Identify some countries that have a positive
impact on your buying decisions.
• Why do these countries have this effect on
you?
• Identify some countries that have a negative
impact on your buying decisions.
• Why do these countries have this effect on
you?
• As a marketer, how might knowledge of the
these perceptions effect your strategy?
10
Extend, Adapt, Create: Strategic
Alternatives in Global Marketing
Strategy 5: Innovation
11
How to Choose a Strategy?
• Managers face two types of errors:
• NIH “Not Invented Here”
• Ethnocentrism
• The product itself
• The market
• Adaptation and manufacturing costs the
company will incur
12
Video
• McDonalds Global and Local Strategy
13
MKTG 3375
Introduction to Global
Marketing
Marketing and
Global Marketing Defined
Marketing: “the activity, set of institutions, and
processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and
society at large”
Marketing Mix: The 4 Ps
Global Marketing: The scope of activities
outside the home market
2
Pair Up and Discuss…
The primary external environmental factors in
marketing include:
✓Social environment
✓Economic environment
✓Competitive environment
✓Political/legal environment
✓Technological environment
In addition to the typical domestic concerns a company
might have when thinking about each factor (eg,
inflation), what additional issues do companies with
foreign activities have to concern themselves with?
3
Globalization
“Economic globalization constitutes integration
of national economies into the international
economy through trade, direct foreign
investment (by corporations and multinationals),
short-term capital flows, international flows of
workers and humanity generally, and flows of
technology.”
~Jagdish Bhagwati
1-4
Global Industries
An industry is global to the extent that a
company’s industry position in one country is
interdependent with its industry position in
another country
Indicators of globalization:
▪ Ratio of cross-border investment to total capital
investment
▪ Proportion of industry revenue generated by all
companies that compete in key world regions
▪ Ratio of cross-border trade to worldwide
production
1-5
Domestic versus Global Marketing
Single Country
Marketing Strategy
• Target Market Strategy
• Marketing Mix
• Product
• Price
• Promotion
• Place
Global Marketing
Strategy
• Global Market Participation
• Marketing Mix Development
• Adapt or Standardize?
• Concentration of Marketing
Activities
• Coordination of Marketing
Activities
• Integration of Competitive
Moves
1-6
Standardization versus Adaptation
✓Globalization (Standardization)
• Developing standardized products marketed
worldwide with a standardized marketing mix
✓Global localization (Adaptation)
• Mixing standardization and customization in
a way that minimizes costs while maximizing
satisfaction
• Think globally, act locally
• May be a combination of standard product
and nonstandard approaches (eg, distribution
or packaging)
1-7
The Importance of Going Global
✓Within the last decade, world trade has grown
by 140%
✓In the past few decades, growth in global trade
has outperformed domestic growth
✓International specialization and cross-sourcing
have made production more efficient
✓For U.S. companies, 75% of total world market
for goods and services is outside the country
➢Coca-Cola earns 75% of operating income and
2/3 of profit outside of North America
8
Management Orientations
✓Ethnocentric Orientation
• Home country is superior to others
✓Polycentric Orientation
• Each country is unique
✓Regiocentric Orientation
• companies serve markets throughout the
world but on a regional basis
✓Geocentric Orientation
• entire World is a potential market
1-9
Pair Up and Discuss…
What factors (or forces) do you
think are driving the World towards
more economic integration?
What factors (or forces) do you
think are restraining the World
from greater economic integration?
1-10
Driving Forces Affecting Global
Integration & Global Marketing
✓Multilateral trade agreements
✓Converging market needs and wants
✓Transport and communication improvements
✓Product development costs
✓Leverage
• Experience transfers
• Scale economies
• Resource utilization
1-11
Restraining Forces Affecting Global
Integration and Global Marketing
✓Management myopia
✓Organizational culture
✓National controls
✓Opposition to globalization
1-12
MKTG 3375
GLOBAL PRODUCTS
1
Basic Product Concepts
• A product is a good, service, or idea
• Product types
✓Industrial goods
✓Consumer goods
–Convenience goods
–Unsought goods
–Shopping goods
–Specialty goods
2
Packaging & Labeling
• Consumer Packaged Goods are a variety of
products whose packaging protects or
contains the product from production to the
end user
➢What roles does packaging serve?
• Labeling provides consumers with various
types of information
➢Regulations differ by country regarding
various products
• Global marketers must understand the
importance of visual aesthetics
3
Branding & Brand Equity
• Bundle of images and experiences in the
customer’s mind
• Brand Equity is the total value that accrues to
a product as a result of investments in the
marketing of the brand
4
Brand Equity Benefits
• Greater loyalty
• Less vulnerability to marketing actions and crises
• Larger margins
• More inelastic consumer response to price
increases
• More elastic consumer response to price
decreases
• Increased marketing communication
effectiveness
5
Branding Strategies
• Multi-branding
• Multi-product (Brand extension)
• Combination or tiered branding
• Co-branding
6
Local versus Global Brands
• Local Brands - Brands that have achieved
success in a single national market
• International Brands - Products and brands
offered in several markets in a particular
region
• Global Products meet the wants and needs of a
global market and are offered in all world
regions
• Global Brands have the same name and similar
image and positioning throughout the world
7
Product/Brand Matrix
8
Country of Origin as a Brand Element
•Perceptions about and attitudes toward
particular countries often extend to
products and brands known to originate
in those countries
9
Exercise
• Identify some countries that have a positive
impact on your buying decisions.
• Why do these countries have this effect on
you?
• Identify some countries that have a negative
impact on your buying decisions.
• Why do these countries have this effect on
you?
• As a marketer, how might knowledge of the
these perceptions effect your strategy?
10
Extend, Adapt, Create: Strategic
Alternatives in Global Marketing
Strategy 5: Innovation
11
How to Choose a Strategy?
• Managers face two types of errors:
• NIH “Not Invented Here”
• Ethnocentrism
• The product itself
• The market
• Adaptation and manufacturing costs the
company will incur
12
Video
• McDonalds Global and Local Strategy
13
MKTG 3375
MARKET
ENTRY STRATEGIES
Investment Cost of Marketing Entry Strategies
2
Which Strategy Should Be Used?
It depends on:
• Vision
• Attitude toward risk
• Available investment capital
• How much control is desired
3
Export Selling vs. Export Marketing
• Export selling involves selling the same
product, at the same price, with the same
promotional tools in a different place
• Export marketing tailors the marketing mix to
international customers
4
Organizational Export Activities
1.
2.
3.
4.
The firm is unwilling to export
The firm fills unsolicited export orders (export seller)
The firm explores the feasibility of exporting
The firm exports to one or more markets on a trial
basis
5. The firm is an experienced exporter to one or more
markets
6. The firm pursues country- or region-focused marketing
7. The firm evaluates global market potential for the
“best” target markets
5
Key Corporate Export Stages
Awareness
Interest
Trial
Adaptation
Demand
Evaluation
6
Potential Export Problems
7
Government Programs that
Support Exports
• Tax incentives
• Subsidies
• Governmental assistance
• Free trade zones
8
Governmental Actions to Discourage
Imports and Block Market Access
• Tariffs
• Import controls (Quotas)
• Nontariff barriers (hidden)
9
Other Duties and Import Charges
• Anti-dumping Duties
• Countervailing Duties offset subsidies of the
exporting country
• Variable Import Levies apply to agriculture
• Temporary Surcharges protect local industries
and are used to adjust balance of payment
deficits
10
Key Export Participants
• Foreign purchasing
agents
• Export brokers
• Export merchants
• Export management
companies
• Manufacturer’s
export agent
• Export commission
representative
• Cooperative exporter
• Freight forwarders
11
Licensing
• A contractual agreement whereby one
company (the licensor) makes an asset
available to another company (the licensee) in
exchange for royalties, license fees, or some
other form of compensation
• Special licensing arrangements:
• Contract manufacturing
• Franchising
12
Advantages to Licensing
•
•
•
•
Requires little initial investment
Method of circumventing tariffs and other barriers
Attractive ROI
Licensees have autonomy to adapt products
Disadvantages to Licensing
• Limited market control
• Returns may be lost
• The agreement may be short-lived
• Licensee may become competitor
• Licensee may exploit company resources
13
Investment
• Partial or full ownership of operations outside
of home country
–Foreign Direct Investment (FDI)
• Forms
– Joint ventures
– Minority or majority equity stakes
– Outright acquisition
14
Joint Ventures
• Advantages
– Allows for risk sharing (financial and political)
– Provides opportunity to learn new environment
– Provides opportunity to achieve synergy by combining
strengths of partners
– May be the only way to enter a market
• Disadvantages
– Requires more investment than a licensing agreement
– Must share rewards as well as risks
– Requires strong coordination
– Potential for conflict among partners
– Partner may become a competitor
15
Investment via
Equity Stake or Full Ownership
• Start-up of new operations
–Greenfield investment
• Merger with an existing enterprise
• Acquisition of an existing enterprise
16
Global Strategic Partnerships
• Possible terms:
• Collaborative agreements
• Strategic alliances
• Strategic international alliances
• Global strategic partnerships
17
Characteristics of
Global Strategic Partnerships
• Participants remain independent following
formation of the alliance
• Participants share benefits of alliance as well
as control over performance of assigned tasks
• Participants make ongoing contributions in
technology, products, and other key strategic
areas
18
Five Attributes of True
Global Strategic Partnerships
• Two or more companies develop a joint longterm strategy
• Relationship is reciprocal
• Partners’ vision and efforts are global
• Relationship is organized along horizontal lines
(not vertical)
• When competing in markets not covered by
alliance, participants retain national and
ideological identities
19
Videos
• Entry Mode Decision – French Cakes
• Standardization versus Adaptation
• Nike Sweatshop
• Bhopal Disaster
20
MKTG 3375
CULTURAL
ENVIRONMENT
Team Think
• In a few sentences, define the term culture.
• Identify aspects of culture that might be of
interest to an international company, and give
examples to illustrate the importance of these
various aspects.
2
Consumer Culture
Culture – ways of living, built up by a group of
human beings, that are transmitted from one
generation to another
“Culture is the collective programming of the
mind that distinguishes the members of one
category of people from those of another.”
~Geert Hofstede
A nation, an ethnic group, a gender group, an
organization, or a family may be considered as a
category.
3
Global Consumer Culture
Global consumer cultures are emerging
–Persons who share meaningful sets of
consumption-related symbols
–For example, pub culture, coffee culture,
fast-food culture, credit card culture, and
soccer culture
Primarily the product of a technologically
interconnected world
–Internet
–Satellite TV
4
Task of Global Marketers
• Study and understand the cultures of
countries in which they will be doing business
• Understand how an unconscious reference to
their own cultural values, or self-reference
criterion, may influence their perception of
the market
• Incorporate this understanding into the
marketing planning process
5
Social Institutions
Culture is acted out in social institutions
✓Family
✓Education
✓Religion
✓Government
✓Business
These institutions function to reinforce
cultural norms
6
Material and Nonmaterial Culture
Culture is both physical and nonphysical
Physical Culture
Abstract Culture
–Clothing
–Tools
–Decorative art
–Body adornment
–Homes
–Religion
–Perceptions
–Attitudes
–Beliefs
–Values
7
Religion
✓The world’s major religions include Buddhism,
Christianity, Hinduism, Islam, and Judaism
✓Is an important source of beliefs, attitudes,
and values.
✓Religious tenets, practices, holidays, and
history impact global marketing activities.
8
Aesthetics
• The sense of what is beautiful and what is
not beautiful
• What represents good taste as opposed to
tastelessness or even obscenity
• Visual–embodied in the color or shape of a
product, label, or package
9
Rituals
• Patterns of behaviour and interaction that
are learned and repeated over time.
• Primary elements:
✓Actors
✓Script
✓Audience
✓Artifacts
10
Team Activity
• Come up with a new holiday and describe its
primary ritual.
• Be sure to describe your ritual along the
following dimensions:
✓Actors
✓Script
✓Audience
✓Artifacts
• The class will vote on the most creative
holiday/ritual.
• What are the marketing implications of your
ritual?
11
Language and Communication
Semiotics — the study of signs and their
meanings
✓Semiotics includes both spoken and
unspoken language
✓Unspoken language includes gestures,
touching, body language
✓Spoken language has four areas:
1. Syntax
2. Semantics
3. Phonology
4. Morphology
4-12
Pronunciation Problems (examples)
• Colgate in Spanish means “go hang yourself”
• IKEA hired linguists to rename products in
Thailand because they had sexual connotations
• Whirlpool spent large sums on advertising only
to find out that French, Italian & German
consumers could not pronounce the brand name
• Diesel brand name was chosen because it is
pronounced the same in all languages
4-13
Hofstede’s Cultural Typology
• Individualism/Collectivism
• Power Distance
• Uncertainty Avoidance
• Achievement/Nuturing (aka Masculinity)
• Long-term Orientation
14
Team Activity
Thinking about Hofstede’s 5 cultural dimensions,
brainstorm ways that marketing would differ
(either the marketing mix or the marketing
process) at the extremes along each dimension.
For example, in what ways would marketing to a
culture high in Individualism differ from
marketing to a culture low in Individualism.
The 5 dimensions are:
• Individualism–collectivism
• Power distance
• Uncertainty avoidance
• Gender-role orientation
• Long-term versus short-term orientation
15
MKTG 3375
ECONOMIC
ENVIRONMENT
The World Economy—An Overview
• In the early 20th century economic integration
was at 10%; today it is 50%
• EU and NAFTA are very integrated
• Global competitors have displaced or absorbed
local ones
2
The World Economy—An Overview
The new realities:
• Capital movements have replaced trade as
the driving force of the world economy
• Production has become uncoupled from
employment
• The world economy, not individual countries,
is the dominating factor
• The struggle between capitalism and
socialism began in 1917 is over
• E-Commerce diminishes the importance of
national barriers and forces companies to
re-evaluate business models
3
Characteristics of Economic Systems
• Stage of market development
• Type of Government
• Trade and capital flows
• Control of transportation, communications
& energy sectors
• Services provided by the state or state
funded
• Institutions
• Markets
Video: Crash Course - Economic Systems
4
Economic Systems
Resource Allocation
Private
Resource
Ownership
State
Market
Command
Market
Capitalism
Centrally Planned
Capitalism
Market
Socialism
Centrally Planned
Socialism
Globalization has made it harder to pigeonhole
economies within the four-cell matrix
5
Economic Freedom
• Rankings of economic freedom among
countries
• “free” “mostly free” “mostly unfree” “repressed”
• Variables considered include such things as:
•
•
•
•
•
•
•
Trade policy
Taxation policy
Capital flows and foreign investment
Banking policy
Wage and price controls
Property rights
Black market
6
Economic Freedom — 2015 Rankings
Free
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Hong Kong
Singapore
New Zealand
Australia
Switzerland
Canada
Chile
Estonia
Ireland
Mauritius
Denmark
United States
Repressed
169.
170.
171.
172.
173.
174.
175.
176.
177.
178.
Argentina
Republic of Congo
Iran
Turkmenistan
Equatorial Guinea
Eritrea
Zimbabwe
Venezuela
Cuba
North Korea
Not ranked: Afghanistan, Iraq, Kosovo, Libya, Liechtenstein,
Somalia, Sudan, Syria
7
Stages of Market Development
• The World Bank has defined four categories
of development using Gross National Income
(GNI) as a base
• Today, the focus is on BRICS emerging
markets: Brazil, Russia, India, China and
South Africa
8
World Economic Pyramid
9
(1) Low-Income Countries
(or subsistence economies)
• GNI per capita of $1,045 or less
• Characteristics
–Limited industrialization
–High percentage of population in farming
–High birth rates
–Low literacy rates
–Heavy reliance on foreign aid
–Political instability and unrest
–Concentrated in Sub-Saharan Africa
10
(2) Lower-Middle-Income Countries
• GNI per capita: $1,046 to $4,125
• Characteristics
–Rapidly expanding consumer markets
–Cheap motivated labor
–Mature, standardized, labor-intensive
industries like footwear, textiles and toys
• India is the only BRIC nation in this category
11
(3) Upper-Middle-Income Countries
(or industrializing economies)
GNP per capita: $4,126 to $12,745
Characteristics:
•Rapidly industrializing, less agricultural
employment
•Increasing urbanization
•Rising wages (but lower wage costs than in
advanced countries
•High literacy rates and advanced education
•BRICS: Brazil, China, South Africa fall in this
group
12
Mistaken Assumptions about Least
Developed Countries (LDCs)
1. The poor have no money.
2. The poor will not “waste” money on nonessential goods.
3. Entering developing markets is fruitless
because goods there are too cheap to make
a profit.
4. People in BOP (bottom of the pyramid)
countries cannot use technology.
5. Global companies doing business in BOP
countries will be seen as exploiting the poor.
13
(4) High-Income Countries
(or industrialized countries)
• GNI per capita: $12,476 or more
• Characteristics:
• Sustained economic growth through innovation
• Service sector is more than 50% of GNI
• Households have high ownership levels of basic
products
• Importance of information processing and
exchange
• Ascendancy of knowledge over capital,
intellectual over machine technology,
scientists and professionals over engineers and
semiskilled workers
14
Class Activity
The seven criteria for describing a nation’s
economy are as follows:
•
•
•
•
•
•
•
Stage of market development
Type of Government
Trade and capital flows
Control of trans, comm, & energy sectors
Services provided by the state
Institutions
Markets
1. Use the seven criteria to develop a profile of
(1) Canada and (2) one of the BRICS
countries.
2. What implications does this profile have for
marketing opportunities in the BRICS
country?
15
Product Saturation Levels
• The percent of potential buyers or households
who own a product
• India: 20% of people have telephones
• Autos: 1 per 43,000 Chinese, 21 per 100 Poles,
49 per 100 EU adults, 8 per 1,000 in India, 200
out of 1,000 in Russia, 565 out of 1,000 in
Germany
• Computers: 1 PC per 6,000 Chinese; 11 PCs per
100 Poles; 34 PCs per 100 EU citizen
16
Balance of Payments
• Record of all economic transactions between
the residents of a country and the rest of the
world
• Current account–record of all recurring
trade in merchandise and services, and
humanitarian aid
• trade deficit—negative current account
• trade surplus—positive current account
• Capital account–record of all long-term
direct investment, portfolio investment, and
capital flows
17
GATT & WTO
• General Agreement on Tariffs and Trade
• Treaty among nations to promote trade
among members established in 1947
• Handled trade disputes
• Replaced by World Trade Organization (WTO)
in 1995
• Forum for trade-related negotiations among
160 members
• Serves as a dispute mediator
• Has enforcement power & can impose
sanctions
18
Preferential Trade Agreements
• Many countries seek to lower barriers to
trade within their regions
• PTAs give partners special treatment and
may discriminate against others
• Over 300 PTAs have been notified to the
WTO
19
Economic Integration
• Economic Integration – process whereby
countries coordinate to reduce trade barriers
• Trading Bloc – a group of countries that join
together and agree to increase trade between
themselves
• Success of blocs depend on:
✓Leadership
✓Proximity
✓Commitment to cooperation
20
Levels of Economic Integration
Economic Union – economic/political
harmonization
Common Market – factor movement
Customs Union – common external tariffs
Free Trade Agreement – abolish tariffs
21
Economic Union
Full evolution of economic union
✓creation of unified central bank
✓use of single currency
✓common policies on issues such as
agriculture, social policy, transport,
competition, mergers, taxation
✓requires extensive political unity
✓would lead to a central government
in time
22
North America—NAFTA
• NAFTA established as a free trade area in
1994
• All three nations pledge to promote
economic growth through tariff reductions
and expanded trade and investment
• No common external tariffs
• Restrictions on labor and other movements
remain
23
NAFTA Income and Population
24
U.S. Goods Exports in 2014
$1.6 Trillion
25
U.S. Goods Imports in 2014
$2.3 Trillion
26
The European Union (EU)
• Initially began with the
1958 Treaty of Rome
• Objective is to harmonize
national laws and regulations
so that goods, services,
people, and money could
flow freely across national
boundaries
• 1991 Maastricht Treaty set
stage for transition to an
economic union with a
central bank and single
currency (the Euro)
27
European Union
• 28 countries
• 450 million people
• $15 trillion GNI
• Euro currency, 1999
• Harmonization of laws and regulations
• Price transparency
• No customs at national borders
28
European
Union
29
Latin America: SICA, Andean
Community, Mercosur, CARICOM
• Includes the Caribbean, Central, and South
America
• History of no growth, inflation, debt, and
protectionism has given way to free markets,
open economies, and deregulation
• Some concern for further growth with the
rise of left-leaning politicians
30
Central American Integration System
(SICA)
• El Salvador,
Honduras, Guatemala,
Nicaragua, Costa
Rica, and Panama
• Moving towards a
common market
• Common External
Tariff of 0 to 15%
•Retains tariffs on
goods also produced
in importing country
31
DR-CAFTA
• SICA members El Salvador, Honduras,
Guatemala, Nicaragua, Costa Rica joined
the Dominican Republic and the United
States in a FTA
• 80% of US goods and 50% + of
agricultural goods are duty free
• Paperwork is reduced
• Reduced risks mean more direct foreign
investment
32
Andean Community
• Bolivia, Colombia, Ecuador, Peru
• 45th anniversary in 2014
• Customs Union
• Abolished foreign exchange, financial and
fiscal incentives, and export subsidies
• Established common external tariffs
33
Common Market of the South
(MERCOSUR)
• Argentina, Brazil, Paraguay, Uruguay,
Venezuela
• Customs union, seeks to become common
market
• Internal tariffs eliminated
• Established common external tariffs up to 20%
• In time, factors of production will move freely
through member countries
• Bolivia, Chile, Ecuador, Peru
• Associate members
• Participate in free trade area but not customs
union
34
CARICOM
Founded in 1973 by 15 members
17 million population
Stagnant for 20 years
Customs Union in 1991 with common external
tariffs
• Rejected the idea of a economic union in 1998
as a single currency would not be especially
beneficial.
•Caribbean Basin Trade Partnership Act exempts textile
and apparel exports to the U.S. market access from
duties and tariffs. Caribbean Basin Initiative of 20
nations includes CARICOM.
•
•
•
•
35
Asia-Pacific: The Association of
Southeast Asian Nations (ASEAN)
• Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, Philippines, Singapore, Thailand,
Vietnam
• Top trading partners U.S., Japan, EU, China
• Geographically close; historically divided
• “ASEAN plus six” (Japan, China, Korea,
Australia, New Zealand, India) working
towards an economic community
• China/ASEAN FTA established in 2010
removes 90% of tariffs on traded goods
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The Middle East
• Afghanistan, Bahrain, Cyprus, Egypt, Iran, Iraq,
Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi
Arabia, Syria, the United Arab Emirates, Yemen
• Primarily Arab, some Persian and Jews
• 95% Muslim, 5% Christian and Jewish
• Wide variation in Economic Freedom rankings
• Bahrain is 18th, UAE is 25th, Saudi Arabia is
77nd
• Oil prices drive commerce
• 25% of world’s oil in Saudi Arabia
• Arab Spring 2011
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Gulf Cooperation Council
•Established in 1981
by 6 countries with
45% of world’s oil,
only 18% of output
•These countries
are attempting to
diversify industries
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Africa
• 54 nations over three distinct areas
– Republic of South Africa
– North Africa
– Black Africa or sub-Saharan Africa
• Mena: Middle East and North Africa
–Viewed as a regional entity
• Regional agreements
– Economic Community of West African States
– East African Cooperation
– South African Development Community
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