IBM535- Past Year Answer (December 2013

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Section A

(a) TPPA’s level of economic integration is in the regional integration whereby TPPA is a
free trade deal which would see the reduction and removal of tariff and non-tariff barriers to
the free flow of goods and services as well as factors of production among each other.

(b) Four consequences if the medical and tobacco businesses to be under TPPA agreement
are:

 Country are at risk to be sue by the tobacco company for discouraging smoking by
taking steps to reduce tobacco usage.
 Cost of medical equipment is expected to increase.
 The inclusion of medical business in the free trade deal will not lead to cheaper
medicines.
 Tobacco’s company would benefit from the free trade deal the most as it will allow
them to claim for breach in trade agreement.

(c) Two advantages of joining the Trans-Pacific Partnership Agreement (TPPA):

 Market access- Members of TPPA obtain preferred access to markets of others
members.

 Investment- Attract Foreign Direct Investment (FDI) as it will reduced the cost.

Two disadvantages of joining the Trans-Pacific Partnership Agreement (TPPA)

 Lock in to Domestic Reforms

 Negotiations requires High Resources

PART B

(b) 3 reasons for cultural miscommunication:  Different Values  Different Types of Communication Styles  Different Concepts of Time Question 2 (a) Absolute Advantage .  Ethnocentric individual will judge other groups relative to their own particular ethnic group or culture. Cultural stereotype  Generalization or assumption that people or a person make about the characteristics of another individual or all member of a group. behaviour. especially concerning language. customs.  Based on image what people or individuals in that group are like. and religion.Question 1 (a) Ethnocentrism:  Tendency to believe that one’s ethnic or cultural group is centrally important & that all other groups are measured in relation to one’s own.

 It failed to include other subtle advantage that nation may hold. 3. Factors Endowment  Refer to the condition of production factors such as labour.  Focuses on relative efficiency (b) Porter Diamond Model 1. Demand Condition  Refers to the demand generated for goods and services in that particular country based on these characteristics. Structure & Rivalry  Determinants of how organizations are established. but with related products and services such as leather working machinery. mixture.  Countries should specialize in the production of goods that they have an absolute advantage. they still benefit from international trade Comparative Advantage  It make sense for a country to specialize in the production of those goods that it produces most efficiently and to buy goods that it produces less efficiently from other countries. etc. but rather the ratio between how effortlessly the two countries can produce the products. 2. energy.  For example. design.  Even countries lack of absolute advantage. scope and growth rate & mechanism that transmit domestic preferences to foreign markets . Italy is not only successful with shoes and leather. financial resources and capital assets in a country  Enhance competition in related industries. structured & managed which in turn influences domestic competition  For example.  What important is not the absolute cost of production. Firm Strategy. shoe and leather industry in Italy. Japan's relative lack of raw materials has spurred miniaturization and zero-defect manufacturing.  Countries are differ in their ability to produce goods efficiently.

 German auto companies have dominated the world when it comes to the high- performance segment of the world automobile industry. Nissan. . Firm Strategy. as well as the foreign markets in which they compete. linked to a domestic market which has traditionally demanded a high level of engineering performance. Mitsubishi. Toyota. Isuzu. and Subaru) provide intense competition in the domestic market. Suzuki.  4. Mazda.  For example. Structure and Rivalry  Refers to whether there are suppliers who are internationally competitive and supportive when the domestic market itself is competitive. the Japanese automobile industry with 8 major competitors (Honda.