Globalization – the integration of markets globally
Imports – products that are made or grown abroad and sold in Canada
Exports – products made or grown in Canada that are sold abroad
General agreement on tariffs and trade (GATT) – international trade agreement to encourage the multilateral reduction
or elimination of trade barriers
World trade organization (WTO) – organization through which member nations negotiate trading agreements and
resolve disputes about trade policies and practices
European union (EU) – agreement among major western European nations to elimination or make uniform most trade
barriers affecting group members.
North American free trade agreement (NAFTA) – agreement to gradually eliminate tariffs and other trade barriers
among the United States, Canada, and Mexico.
Per capita income – the average income per person of a country
Absolute advantage – a nation’s ability to produce something more cheaply or better than any other country
Comparative advantage – a nation’s ability to produce some products more cheaply or better than it can others.
National competitive advantage – a country will be inclined to engage in international trade when factor conditions,
demand conditions, related and supporting industries, and strategies/structures/rivalries are favourable
Balance of trade – the difference in value between a country’s total exports and its total imports
Trade deficit – occurs when a country imports more than it exports
Trade surplus – occurs when a country exports more than it imports.
Balance of payments – the difference between many flowing in to and out of a country as a result of trade and other
Exchange rate – the ratio of one currency to another
Euro – a common currency shared among most of the members of the European union excluding Denmark, Sweden, and
the United Kingdom
Exporter – a firm that makes products in one country and then distributes and sells them in others.
Importer – a firm that buys products in foreign markets and then imports them for resale in its home country
International firm – a company that conducts a significant portion of its business abroad and maintains manufacturing
Multinational firm – controls assets, factories, mines, sales, offices, and affiliates in two or more foreign countries.
Independent agent – a foreign individual or organization who agrees to represent an exporter’s interest in foreign
Licensing arrangement – an arrangement by an owner of a process or product to allow another business to produce,
distribute, or market it for a free or royalty
Branch office – a location that an exporting firm establishes in a foreign country in order to sell its products more
Strategic alliance – an enterprise in which two or more persons or companies temporality join forces to undertake a
Foreign direct investment (FDI) – buying or establishing tangible assets in another country
Investment Canada – replaced FIRA in 1985, designed primarily to attract and facilitate foreign investment in Canada.
Quota – a restriction by one nation on the total number of products of a certain type that a be imported from another
Embargo – a government order forbidding exportation and/or importation of a particular product
Tariff – a tax levied on imported products
Subsidy – a government payment to help domestic business compete with foreign firms
Protectionism – protecting domestic business at the expense of free market competition
Local–content laws – laws requiring that products sold in a particular country be at least partly made in that country
Business practice law - law or regulation governing business practices in given countries
Cartel – any association of producers whose purpose is to control supply of and prices for a given product