NOBLES

INTERNATIONA
L SCHOOL
Ms. Cecille
 BUSINESS 10
Lesson Plan

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 Objectives:
LESSON:  Discuss the rise of international business and
describe the major world marketplaces, trade
UNDERSTANDING THE agreements, and alliances.
GLOBAL CONTEXT OF  Explain how differences in import-export balances,
exchange rates, and foreign competition determine
BUSINESS the ways in which countries and businesses respond
to the international environment.
 Discuss the factors involved in deciding to do
business internationally and in selecting the
appropriate levels of international involvement and
international organizational structure.
 Explain the role and importance of the cultural
environment in international business.
 Describe some of the ways in which economic,
legal, and political differences among nations affect
international business.

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 PROCEDURE
 Engage:
Please read the article at the beginning of the chapter and list down the effects of import
embargo between Cuba and the United States.

 Explore:
Discussion of the lesson

Questions:
1. What is globalization?
It is a process by which the world economy is becoming a single interdependent system.
It describes how trade and technology have made the world into a more connected and
interdependent place.
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 PROCEDURE:
Questions:
2. What are imports? Exports?
Imports are products made or grown abroad but sold domestically.
Exports are products made or grown domestically but shipped and sold abroad.
3. What are the impacts of globalization?
• Provides a fruitful area for growth
• Local and small businesses are given opportunities to buy products from international
suppliers
• Effects of exchange rate fluctuations
• Opens borders for foreign businesses
• Competition intensifies
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 PROCEDURE:
Questions:
4. What are some benefits of globalization?
• Potential for higher standards of living
• Improved business profitability
• New technologies have made international travel, communication, and
commerce faster and cheaper
• Competitive pressures (keeping up with competitors)

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 PROCEDURE:
Questions:
5. What are some cons of globalization?
• Exploitation of workers
• Bypassing domestic environment and tax regulations
• Loss of cultural heritage

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THE MAJOR
WORLD
MARKETPLACES
 DISTINCTION BASED ON WEALTH
• The World Bank, a UN agency, uses per-capita income (average income per person) to make distinctions
among countries.

4 CATEGORIES OF COUNTRIES
 High-income countries: those with annual per-capita income greater than
$12,476.
 Upper-middle-income countries: those with annual per-capita income of
$12,475 or less, but more than $4,036.
 Lower-middle-income countries: those with annual per-capita income of
$4,035 or lower but more than $1,026.
 Low-income countries (developing countries): those with annual per-
capita income of $1,025 or less.

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 GEOGRAPHIC CLUSTERS
The 3 Major Marketplaces in the World Economy
 North America:
United States of America (world’s largest marketplace and most stable economy)
Canada (US and Canada are among each other’s largest trading partners)
Mexico (a major manufacturing center) (in threat because of China and the occurrence of
drug-related violence)
 Europe:
Western Europe: Germany, the United Kingdom, France (mature but fragmented marketplace)
The transformation of this region via European Union into an integrated economic system has
further increased its importance along with E-commerce and technology.
Southeastern England, the Netherlands, and the Scandinavian countries are experiencing a
surge in internet start-ups.
Ireland (one of the world’s largest exporters of software)
Strasbourg, France (a major center for biotech start-ups)
Barcelona, Spain (flourishing in software and internet companies)
Frankfurt, Germany (dotted with software and biotech start-ups)
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 GEOGRAPHIC CLUSTERS
The 3 Major Marketplaces in the World Economy
 Europe:
Eastern Europe: (once primarily a communist, has gained importance both as a marketplace and
as a producer)
Polland sets operation of companies such as Daewoo, Nestle, General Motors, ABB (Asea Brown
Boveri)
Hungary has Ford, General Motors, Suzuki, and Volkswagen factories
Parts of Russia, Bulgaria, Albania, Romania, and other countries have hampered development
due to governmental instability, corruption, and uncertainty.
 Pacific Asia (Japan, China, Thailand, Malaysia, Singapore, Indonesia, South Korea, Taiwan,
the Philippines, and Australia)
Economies grew in the 1970s and 1980s, but slowed down in the 1990s after a currency crisis. The
region was also affected by the global recession in 2009.
Japan dominates the region (Toyota, Toshiba, Nippon Steel
South Korea (Samsung, Hyundai, Kia)
Taiwan (owner of Chinese Petroleum, manufacturing home of many foreign firms)
11 Hong Kong (major financial center)
 GEOGRAPHIC CLUSTERS
The 3 Major Marketplaces in the World Economy
 Pacific Asia (Japan, China, Thailand, Malaysia, Singapore, Indonesia, South Korea, Taiwan,
the Philippines, and Australia)
China (one of the world’s most densely populated countries is one of the world’s largest
economies; has low per-capita income but has a lot of potential consumers)
India (not part of Pacific Asia but rapidly emerging as one of the globe’s most important
economies)

 Technology plays an important role in the future of the Pacific Asia region, but in some parts
of Asia, poorly developed electronic infrastructure, slower adoption of computers and
information technology, and a higher percentage of lower-income consumers hamper the
emergence of technology firms.

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TRADE AGREEMENTS AND ALLIANCES
 Various legal agreements have sparked international trade and shaped the
global business environment.
 Every nation has formal trade treaties with other nations.

1. What is a treaty?
A treaty is a legal agreement that specifies areas in which nations will cooperate
with one another.
Examples: North American Free Trade Agreement (NAFTA), European Union (EU),
Association of Southeast Asian Nations (ASEAN), World Trade Organization (WTO)
 North American Free Trade Agreement (NAFTA)
 Agreement to gradually eliminate tariffs and other trade barriers among the United
States, Canada, and Mexico including agreements on environmental issues and labor
abuses.
 Created a more active and unified North American Market

European Union (EU)

 Agreement among major European nations to eliminate or make uniform most trade
barriers affecting group members including the elimination of most quotas and setting
uniform tariff levels on imported and exported products of the member nations
 Euro is EU’s common currency
 In 2016, UK voted to withdraw from the union and was finalized on January 31, 2020.

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 The Association of Southeast Asian Nations (ASEAN)
 Was founded in 1967 as an organization for economic, political, social, and cultural
cooperation among Southeast Asian nations
 In 1985, Vietnam became its first communist member

The World Trade Organization(WTO)

 In 1947, The General Agreement on Tariffs and Trade was signed with the purpose to
encourage the multilateral reduction or elimination of vtrade barriers such as tariffs and
quotas.
 On January 1, 1995, the World Trade Organization was created to promote globalization
 Organization through which member nations negotiate trading agreements and resolve
disputes about trade policies and practices.
 GATT is the actual treaty that governs the WTO
 Has 160 member countries

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 The World Trade Organization(WTO)
 Member countries are required to open markets to international trade

3 Goals of WTO
1. Promote trade by encouraging members to adopt fair-trade practices
2. Reduce trade barriers by promoting multilateral negotiations
3. Establish fair procedures for resolving disputes among members

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INTERNATIONAL TRADE
 The global economy is essentially defined by international trade.
 International trade occurs when an exchange involving goods, services, and/or
currency takes place across national boundaries
 International trade can pose problems if a country’s imports and exports don’t
maintain an acceptable balance.
 The balance of trade and balance of payments are the two measures countries use to
decide whether an overall balance exists between imports and exports.
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