Econ 12C – A (LEC) - International Business and Trade 17:30 – 18:00 / Tuesday and Friday

 VISION OF SILLIMAN UNIVERSITY

A leading Christian Educational Institution committed to human development for the
well-being of the society and the environment.

 MISSION OF SILLIMAN UNIVERSITY

❖ Infuse into the academic learning the Christian faith anchored on the gospel of Jesus
Christ: provide an environment where Christian fellowship and relationship can be
nurtured and promoted.
❖ Provide opportunities for growth and excellence in every dimension of University life
in order to strengthen character, competence, and faith.
❖ Instill in all members of the University community an enlightened social
consciousness and a deep sense of justice and compensation.
❖ Promote unity among peoples and contribute to national development.

 GOALS AND OBJECTIVES OF THE COLLEGE

Within the framework of the mission statement of Silliman University, the College of
Business Administration aims to inculcate in the students the philosophy of service to
others, nurtured by the ideals of Christian faith as it prepares them for responsible
leadership in agriculture, commerce, industry, and government.

 PHILOSOPHY OF CBA EDUCATION

“Service to others nurtured by the ideals of Christian Faith.”

 VIRTUAL CLASSROOM POLICIES

1. Don’t forget to click Attendance for each session. The Present button is only available
for 15 mins., beyond that choices left are Late, Excused or Absent. The Late button is
available for 30 mins. only.
2. Scan the topics previously discussed and check if you have finished all the
requirements. (if provided by the teacher)
3. Always Check the Bulletin or Announcement section for the latest updates /
instructions from your teacher.
4. When entering the Zoom interface, choose Listen only. Click the mic button when you
are given permission to talk or when your name is called. Make sure to turn off the mic
after.
5. Questions can be asked after the discussion through chat or through a forum if the
teacher so provides.
 6. Click Share webcam/screen if the teacher asks you to do so especially during exams.
7. Share/Present Screen will be enabled by the teacher to show her slideshow during
discussion. Files will also be uploaded in SOUL for future reference.
8. Chapter exams and major exams will all be made in an online exam platform and link
will be given to the students. All of these exams are scheduled.
9. Short quizzes may not be scheduled, and will be placed inside the Chapter / Topic
section.
10. Video conference sessions will happen through Zoom unless otherwise specified.
11. For Zoom, session will be cut off after 40 mins. Use the 2- 5 minute break to go to
the restroom or drink water. Click the Zoom link again after 5mins.
12. If teacher’s connection is unstable or discussion is cut off, check the chat room inside
the Video Conference Room section. Discussion might continue there.
13. All requirements will be submitted and uploaded in SOUL. If the file is beyond
500mb, inform the teacher so you can send it through email.
14. Requirements will have corresponding points and scheduled deadlines.

 Course Methodology
❑ Lecture / Discussion
❑ Presentation of Relevant International Business and Trade Topics and Issues
❑ Online Group Presentation
❑ Online/Oral Examinations
❑ Submission of Reaction / Concept Papers

 Evaluation Measures:
❑ Attendance, Assignments & Oral Recitation 10%
❑ Total Quizzes & Chapter Exams 30
❑ Group Report 15
❑ Midterm Examination 20
❑ Final Examination 25
Total 100%

 Overview of the Course

❖ This course focuses on the core concepts and techniques for entering international marketplace.
Emphasis is on the effect of socio-cultural, demographic, economic, technological, and political-legal
factors in the foreign trade environment.

❖This course will also analyze the causes and consequences of international trade and investment and
will include discussions about why nations trade, what they trade, who gains (or not) from this trade and
other related characteristics of international business and trade.
❖The students will also study the motives for countries or organizations to restrict or regulate
international trade and evaluate the effects of such policies on economic welfare.

❖ Other topics covered will be the effects of trade on economic growth and wage inequality,
multinationals and foreign direct investment, international trade agreements and current trade policy
disputes.

❖ We will also spend some time discussing aspects of the current debate on "globalization" such as the
use of international labor standards, interactions between trade and environmental concerns

❖ The course also aims to introduce students to introductory level theories on international finance
flow and the determination of exchange rates in interconnected economies

 Course Objective
At the end of the course, the student should be able to:
1) Explain the patterns or dynamics of world production, the basic characteristics of
international business and trade and the benefits that may be derived from such;
2) Analyze and compare the various instruments of modern trade policies and evaluate
their impact on domestic and international welfare;
3) Relate how international transactions affect international taxation, tariffs, duties and
non-tariff barriers and improve competitiveness in a truly globalized;
4) Explain the importance and impact of Globalization and Free Trade Areas (FTAs) to
International Business & Trade (ASEAN, EU, NAFTA, MERCUSOR)

 Revised and Updated Course Outline

Part I - Introduction to International Business and Trade
Overview of Economics and Phil. Competitiveness
- Brief Overview of Economics
- Philippine Economic Competitiveness
* Economic Market Competitiveness
* Philippine Economic Resources
Brief History of International Business & Trade
Philippines’ Entry into the International Business & Trade
Introduction to International Business and Trade
- Scope of International Business and Trade
- Features of International Business and Trade
- Advantages & Disadvantages of International Business & Trade
- Factors Affecting International Business and Trade
- Drivers of International Business and Trade
- Forms of International Business and Trade
  Revised and Updated Course Outline
Part II - Globalization and the World Trade Organization
Globalization and the World Trade Organization
- The importance of the General Agreements on Tariffs and Trade
- The birth and importance of the World Trade Organization (WTO)
* WTO Decision Making
* WTO Membership
ASEAN Free Trade Association (AFTA)
- About ASEAN, ASEAN Member States
- ASEAN Charter and Structure
- ASEAN External Relations
EUROPEAN Union
- About the European Union
- Doing Business in the EU
- Business and Trade Relationship between the Phils. and the EU
NAFTA, MERCUSOR, MENA
- Doing Business with these Free Trade Areas/Associations
- Philippines Business and Trade Relationship with these FTAs

ECON 12 C – international business and trade

What is economics?

- Economics is a social science that deals with the proper allocation of scare resources in order to
satisfy human needs and wants.
- It is the study of efficient use of scarce resources for producing goods and services, and
distributing them among people.
- Resources are scare and human wants are unlimited.
- Need appropriate choice or allocate resources properly.
- Economics helps us make rational choice.
- Hence, it is a science with scarce means and unlimited ends.
- It helps us to entangle many economic issues emanating from scarcity.

 2 major branches of economics

1. Microeconomics
- The branch of economics that analyzes the market behavior of individual consumers and firms in
an attempt to understand their decision making processes regarding the allocation of scare
resources and relationship.
- Symbiotic relationship of the firm and the household.
- Resource flow and money flow between the household and the firm, considered as the two
most basic elements of society.

- Principles of microeconomics
1. The law of supply and demand
2. Market and individual behaviors
3. The consumer
4. The producer

2. Macroeconomics
- Macroeconomics is a branch of economics that deals with the performance, structure, behavior,
and decision-making of an economy as a whole. This also includes regional, national, and global
economies, the study of the national economy and its major components.
- Examines economy-wide phenomena such as changes in unemployment, national income, rate
of growth, gross domestic/national product, investments, inflation, and price levels of goods and
services, among others.

 Macroeconomics: role of the government

- Functions of a government

a. Maintain law and order

b. Protection of the environment
c. Regulate labour markets
d. National defence
e. Macro-economic stability
f. Raise taxes
g. Provide public goods
h. Minimize inequality
i. Reduce market failure

 Macroeconomics: role of banks

Banks play an important role in the economy for offering a service for people wishing to
save. Banks also play an important role in offering finance to businesses who wish to
invest and expand. These loans and business investment are important for enabling
economic growth.
- Role of commercial banks in the economic development of a country
1. Banks promote capital formation
2. Investment in new enterprises
3. Promotion of trade and industry
 4. Development of agriculture
5. Balanced development of different regions
6. Influencing economic activities
7. Implementation of monetary policy
8. Monetization of the economy
9. Export promotion cells

 Global trade and business

 International business and trade

- Is the exchange of goods and services in a single global market
- It is virtually a world without borders, inhabited by multi-national companies/corporations who
have joined the geographical world with the intent of conducting research and development,
making sales, increasing market share and maximizing profit.
- International trade permits countries to specialize in the resources found in their economy.
- Countries benefit by producing goods and services they can provide in a most affordable manner
and by buying the goods and services other countries can provide most cheaply. This increases
the country’s comparative advantage.
- International trade makes it possible for more goods to be produced so for more human needs
and wants to be satisfied than if every country tries by itself to produce everything it needs.
 Philippines economic competitiveness
The Philippines
- Capital: Manila
- GDP
- GDP per capita
- Economic structure (agriculture, industry, services)
- External trade
- Currency: Philippine peso
- Political system: unitary republic
- Religion: Catholics, protestants, Muslims
- Population
- Median age
- Language: filipino, English
- Land area – 298,170 sq km
- Approximate flight time: hongkong to manila – 2 hours 15 minutes

 Large domestic market

- Total population of 108.3 million
- There are 81 provinces in the Philippines, with 145 cities and 1,489 towns/municipalities with
42,044 barangays
 - Working Filipino families earned 267 thousand annually on the average; and spend 215
thousand for consumption
- Total consumption expenditure 13,500,971,935,000 (2021) compared to 155,398,775,000
(1960)

 Resources in the Philippines

- Resources are the wealth of the nation and economy and a source of income
1. Natural resources – the Philippines is rich in natural resources, it has fertile, arable
lands, diverse flora and fauna, extensive coastlines, and rich in mineral resource. It is
one of the largest archipelagoes in the world and consisting of more than 7,100 islands
and a land area of 30 million hectares or 300,000 sq. km.
a. Forest resources – total forest land accounts to 10 million hectares which yields
valuable/exportable lumber and related products
b. Non-forest area – total land area is 14.1 million hectares and devoted to
agricultural crops. Major agri crops are sugarcane, coconut, abaca, mango,
coffee, rubber, tobacco etc.
c. Fisheries resources – the Philippines is surrounded by several large bodies of
water therefore the country enjoys large fishery resources.
3 types of fishing
1. Coastal fishing – up to 4.8 km from the coast of our territorial waters;
marginalized fisher folks
2. Deep sea fishing – engaged in commercial fishing vessels; 10 km or more
from the coasts; engaged in deep ocean operation
3. Aquaculture – fishpond operation “the punong”; could either be land or sea
based
d. Mineral resources – mineral resources are scattered all over the country. Heavy
deposits of minerals are found in Benguet, Zambales, Bicol, Cebu, Negros,
Davao, Palawan, etc.
The mining industry
a. Gold
b. Copper
c. Nickel
d. Iron

Introduction to international business and trade economics: a brief overview

 Resources in the Philippines

2. Physical resources – are man-made structures and facilities constructed to increase the
productive capacity of an economy/nation.
• Otherwise known as infrastructure resources.
• These resources are major ingredients to economic development in an economy. It
also increases the competitiveness of the country
 Physical resources include the following:
• Buildings - commercial and industrial structures (Economic/BPO/Medical/Tourism
Zones)
• Utilities - power, water, telecommunications
• Road networks, highways, bridges and transportation system
• Seaports, airports, land transport terminals,
• Technology, skills, facilities and services;
• Public and private support and infrastructure development

Service Supporting infrastructures

Transportation Roads, bridges, tunnels, rail tracks, ports, harbors, airports, distribution
centers, etc.
Water supply Dams, reservoirs, pipes, treatment plants, etc.
Water disposal Sewers, used water treatment plants, etc.
Irrigation Dams, reservoirs, canals, sprinkling systems, etc.
Garbage disposal Landfills, incinerators, recycling facilities, compost units, etc.
Telecommunications Telephone exchanges, telephone lines, oceanic cables, cellular towers, fiber
optic cables, web servers, etc.
Power Power plants, transmission and distribution lines, pipelines, etc.

 Contribution of infrastructure to the economic development

1. Infrastructure enhances ability to work
2. Infrastructure enhances productivity
3. Infrastructure generates linkages in production
4. Infrastructure induces investment
5. Infrastructure enhances size of market
6. Infrastructure facilitates outsourcing
7. Infrastructure induces F.D.I

 Philippine economic competitiveness

Physical resources in the Philippines
- Laguna techno park – a world class industrial park – 460 hectares with 241 locators, 100k+ direct
employment and an export revenue of over USD 6.89 billion.
- Mactan export processing zone – a world class economic park – 185 hectares with 211 locators
- There are 401 operating ecozones nationwide
- 283 – it parks and centers
- 74 – industrial and export processing zones
- 22 – agro-industrial parks
- 19 – tourism ecozones
- 3 medical tourism parks.
 Sources of electrical power
- Geothermal
- Solar
- Wind
- Hydroplant
- Coal powerplant
- Diesel qenset

 Negros Oriental’s primary source of power is the geothermal energy harnessed from the
geothermal fields in Palinpinon, Valencia, Negros Oriental. Providing power to neighboring
provinces like Negros Occidental, Panay Island and Cebu Island
 In the Pipeline HYDRO Power Plant in Mabinay Wind Farm in Bais City

 Water resource region

- The Philippines obtains its water supply from different sources. These include: rainfall, surface
water resources, i.e., rivers, lakes, and reservoirs, and groundwater resources. It has 18 major
river basins and 421 principal river basins as defined by the national water regulatory board
(NWRB).

 Good governance – adequate legal regimes, institutions, infrastructure and capacity are in place.
 Transboundary cooperation – sovereign states discuss and coordinate their actions to meet the
varied and sometimes competing interests for mutual benefit.
 Peace and political stability – the negative effects of conflicts are avoided, including reduced
water quality and/or quantity, compromised water infrastructure, human resources, related
governance, and social or political systems.
 Financing – innovative sources of financing complement funding by the public sector, including
investments from the private sector and micro-financing schemes.
 Drinking water and human well-being – populations have access to safe, sufficient and
affordable water to meet basic needs for drinking, sanitation and hygiene, to safeguard health
and well-being, and to fulfill basic human rights.
 Ecosystems – ecosystems are preserved and can deliver their services, on which both nature and
people rely, including the provision of freshwater.
 Water-related hazards and climate change – populations are resilient to water-related hazards
including floods, droughts and pollution.
 Economic activities and development – adequate water supplies are available for food and
energy production, industry, transport and tourism.

 6 clean water and sanitation

 The water and sanitation SDG, Goal 6
Ensure availability and sustainable management of water and sanitation for all
1. By 2030, achieve universal and equitable access to safe and affordable drinking water for all
- Access to water
2. By 2030, achieve access to adequate and equitable sanitation and hygiene for all and end open
defecation, paying special attention to the needs of women and girls and those in vulnerable
situations
- Access to sanitation
3. By 2030, improve water quality by reducing pollution, eliminating dumping and minimizing
release of hazardous chemicals and materials, halving the proportion of untreated wastewater
and substantially increasing recycling and safe reuse globally.
- Water quality

 Water utilities need to prepare and plan for all hazardous events that may impact their systems.
- By 2050, 70% of population in urban areas. Cities and their water utilities must take an active
role in watershed management, as a disruption in the supply of freshwater resources to cities
can have significant socio-economic, environmental and health consequences.
- Climate change – irregular patterns of water availability. Climate change will disrupt historical
weather patterns and add an additional layer of uncertainty to long-term planning for water
utilities and the populations they serve.
- Population growth – growing demand for resources. As global projections show a continued
increase in population and urbanization, that water utilities supplying cities will need to manage
increasing demand for the resource.
- Water users – competition for water resources. Increased competition for limited water
resources between different users means water utilities need to put in place measures to ensure
continued provision of safe and secure water supply.

Physical Resources in the Philippines

 Transport Infrastructure
- • Roads
- • Railways
- • Seaport
- • Airport

Roads, Railways, Airports , Seaports

• While it’s possible that not all four major transport modes are present in every province

• All provinces, cities and towns have roads and highways

• This is for the flow of goods and humans into every growth area or center in a country or economy

• All these represents and supports the competitiveness of an economy

Importance Roads and Highways

• Constitutes an important infrastructure system linking areas of production with markets, and
connecting the rural areas with urban centers

• Crucial infrastructure in economic development and competitiveness but receive the least attention in

the network, esp in less developed countries

- Roads exist in various forms and being used in a variety of ways

In contrast, roads in HDCs offer the highest Level of Service

- Interstate 80, seen here in Berkeley, California is a freeway with many lanes and heavy traffic
(source: wikipedia)
- Turri Road, a five mile loop through rolling hills and cattle country in Los Osos, California

Overseas Highway, Florida

- Highway-bridge combination between mainland Florida and the vacation hotspot the Florida
keys (7-mile bridge)
- -A feeling of driving across the ocean for miles and miles Increased tourism revenue and influx
of tourists

8 major bridges to link Visayas, Luzon

1. Luzon-Samar bridge 18.2 km

2. Leyte- Mindanao bridge 20 km
3. Panay- Guimaras bridge 5.7 km
4. Guimaras – Negros Inter-Island linkages 12.3 km
5. Bohol – Lapinig island bridge 1km
6. Lapinig island – Leyte bridge 18 km
7. Cebu – negros link bridge 5.5 km
8. Cebu – bohol bridge 24.5 km

Roads are indispensable and exist even in seemingly ‘’impossible conditions’’

- North Yungas Road 80 km long in La Paz, Bolivia a.k.a. ‘’The Death Road”

Roads are the country’s major assets

• Almost everybody uses roads or dependent to it for everyday activities

• Roads drive development

• It is vital in the delivery of goods and services

• It is essential in poverty reduction as it enables and improves the access to basic services and
development opportunities

Metro Dumaguete Diversion Road – Bacong-Valencia-Dumaguete-Sibulan

Coordinating Roads and Infrastructure Investments for Development (CR+ID)

- NOCCI in partnership with The Asia Foundation and Australian Aid (AusAid) successfully
implemented and completed the CR+ID (Coordinating Roads & Infrastructure Development)
Project resulting in P4.5Billion of approved roads and infra projects in March, 2017 by both the
Provincial Development Council of Negros Oriental and the Negros Island Regional Development
Council.

National Highway Along Tanjay City

National Highway Along Bais City

National Highway along Bindoy and Manjuyod

Top 10 most expensive build, build, build projects

1. New Manila International Airport – $14.48 billion

2. North South Commuter Railway extension – 12.37
3. Metro Manila subway project phase 1 – 7.03
4. Bataan – Cavite interlink bridge – 3.68
5. PNR south long haul – 3.45
6. North south commuter railway – 2.94
7. Ninoy Aquino international airport – 2
8. Mindanao rail project phase 1 – 1.92
9. Panay- Guimaras negros bridge – 1.91
10. Quezon- Bicol expressway – 1.76

- There are 2 runways at Ninoy Aquino International Airport, namely Runway 06/24 (60M width
and 3,737M length) and Runway 13/31. (45M width and 2,258M length)
- Port of Manila Covering an area of some 137.5 hectares, Manila is the leading port in the
Philippines, and one of the oldest, busiest and most important ports in the entire southeast
 Asian region, having been a vital trade link between the Far East and the rest of the world for
over 1,000 years

Philippines Ports

Passenger and Ferry Ports

- The Philippines have 429 fishing ports and 821 commercial ports. We only list ports interesting
for inter-island passenger and vehicle transportation. This page shows you if your destination
island has ferry links and which companies sail to your island.
- The port of Manila is the largest seaport in the Philippines, and is the premier international
shipping gateway to the country. But when it comes to passenger numbers then Cebu’s port is
the most important one followed by Iloilo on Panay Island.

PHILIPPINE ECONOMIC COMPETITIVENESS

 Human Resources
- the labor force of the country. Also enhances the competitiveness of the economy with the
availability of quality manpower
✓ Human resources means the size of population of a country along-with its efficiency,
educational qualities, productivity, organizational abilities and foresightedness.
✓ It encompass all that is needed for labor to produce goods and services.
✓ These elements include the expertise, knowledge, training, skills, experience, and other
characteristic needed to create economic value.
✓ Therefore, human resources is a direct contributor to producing goods and services in all
types of economies

 Human Resources in the Philippines

Quality Manpower and Resources

❖ The Filipino workforce is one of the most compelling advantages the Philippines has over any other
Asian country, Filipinos are rated to be skilled to highly skilled, productive, highly trainable and multi-
skilled workforce.
❖ With higher education priority, the literacy rate in the country is 97.95% - among the highest in the
ASEAN Region. English is taught in all schools, making the Philippines the world's third largest English-
speaking country for quite some time.

❖ Every year, there are some 618,000 graduates enriching the professional pool.

 Positive Impact of Human Resources on Economic Development

1. Increase in Labor Supply

2. Increase in Production

3. Increase in Demand

4. Increase in Labor Productivity

 Abundant Educated Manpower

• Total Population of 108,310,850 Million

• Total Labor Force of 45.4 Million

• Literacy rate of 97.95 %

• Total Higher Education Institutions of 2,396; 1,729 are private and 667 are state-run colleges and
universities

• Average yearly graduates in all courses of 618,000 (nationwide)

 Widespread use of English

• Literacy rate of 97.95 %

• 2015 3rd Largest English Speaking Country in the World

• 2013 World’s Best Country in Business English

• World’s Leading Location for Call Centers outslugging the BPO Leader INDIA (voice category)

• 1.3M direct jobs and 4.1M indirect jobs with a total estimated revenue of US$ 26.3-B in 2019

• With 1,182 call center operators in the country; 788 of which are PEZA registered

 The Philippine E-Investment primer

- According to a survey conducted by the U.S. – based Meta group, the Philippines is ranked first
in the number of knowledge-based jobs and workers worldwide. Meanwhile, the Philippines has
the second highest number of skilled workforce worldwide, according to the IMD world
 competitiveness yearbook of 2013. Aside from the huge, productive, trainable, and multi-skilled
labor force, the Philippines also has highly qualified managers and information technology (IT)
staff and engineers.
- Moreover, the Philippines has one of the highest literacy rates in the region, with 93.9% of the
population capable of being trained for essential skills and competencies. The country’s unique
edge comes from the high level of English proficiency of filipinos. In fact, the Philippines is the
third largest English-speaking country in the world and the top-ranked country in the world for
business English.
- It boasts of a good educational system, which has recently been adjusted to adapt to global
standards. Under the current education system, the government offers free primary (six years)
and secondary education (six years, divided into junior and senior high school), and reasonable
yet competitive tertiary/collegiate education (four years).

 Top 10 English Speaking Countries in the World

Rank Country % English Speakers Total English Speakers
1 United States 95.81% 2 51,388,301
2 India 11.38% 125,226,449
3 Philippines 92.58% 89,800,000

 Top Business English Countries (Global English Corp.)

Rank Country Basis
1 Philippines Ability to lead Business Discussion

 2013 BEI summary of results by country

Philippines BEI – 7.95

 Top 20 schools in the Philippines

4 Silliman University

International Business and Trade

 Brief History of International Business and Trade

- International trade has a rich history starting with Barter System and being replaced by
Mercantilism in the 16th and 17th Centuries.
- The 18th Century saw the shift towards liberalism. It was in this period that Adam Smith, the
father of Economics wrote the famous book ‘The Wealth of Nations’ in 1776 where in he
defined the importance of specialization in production and brought International trade under
the said scope. Led the growth of Industrial Revolution.
- In the beginning of the 19th century saw the move towards trade professionalism, which
petered down by end of the century. In the early start of the century, countries in the west
came up with extensive move towards economic liberty where in quantitative restrictions were
done away with and customs duties were reduced across countries.
- Establishing business anywhere and finding employment was easy and one can say that trade
was really free between countries around this period.
- The 1st and 2nd World Wars changed the entire course of the world trade and countries built
walls around themselves with wartime controls. Post world war - as many as five years went into
dismantling of the wartime measures and getting back trade to normalcy.
- However, due to economic shocks and recessions that led to fluctuations and depreciation of
currencies after the 2nd World War, government were pressured to adopt protective
mechanism by raising custom duties and or trade tariffs to achieve economic growth.
- The need to reduce the pressures of economic conditions and ease international trade between
countries gave rise to the World Economic Conference organized by League of Nations where in
the most important industrial countries participated and led to drawing up of Multilateral Trade
Agreement. This was later followed with the General Agreement of Tariffs and Trade (GATT) in
1947.
- Multilateral Trade Agreement is a trade agreement between more than 2 countries intended to
lower tariffs and barriers among member countries to improve trade relations
- The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many
countries, whose overall purpose was to promote international trade by reducing or eliminating
trade barriers such as tariffs or quotas over a period of time from April 1947 to December 1993.

 Objectives of GATT
1. To provide equal opportunities to all countries in international market for trading
2. To increase the effective demand for real income growth and goods
3. To minimize tariffs on trade ensuring mutual benefit
4. To provide proper solution to the disputes related to international trade
5. To ensure a better living standards as a whole

- Today, the understanding of international trade and the factors influencing global trade is much
better understood.
- The context of global markets have been guided by the understanding and theories developed
by economists based on Natural resources available in various countries which give them the
comparative advantage, Economies of Scale of large scale production, technology in terms of e
commerce as well as product life cycle changes in tune with advancement of technology as well
as the financial market structures.
 Timeline of international business and trade

 Philippines Entry into the International Business and Trade

Barter System

– the old method of exchange of goods and or services with our neighbors such as the Chinese,
Malays and Indians (from India). Products from the Philippines exchanged were rice, coconuts,, palm
oil, sugar, fibers, straws, cane, dyewoods, lumber, snails, beeswax, medicinal plants, tortoise shell,
pearls and mother of pearl shells etc… while the Chinese brough in cotton, linen, silk, porcelain, iron,
household utensils and other crude manufactured wares

- Records show that Chinese merchants came to the Philippines to trade porcelain, silk and
metalware in exchange for gold, pearls, beeswax and medical plants, which the Philippines is
naturally rich in.

- The Spanish Colonization introduced the Philippines to the world with the Tobacco Monopoly in
1782 and the Galleon Trade through the Manila-Acapulco Trade

- ✓ In 1565, the Spaniards marked their first settlement in Cebu when they sought to acquire a
share in the lucrative spice trade.
- ✓ When the King of Spain abolished the Royal Company of the Philippines, it opened the port
Manila to global trade

- . ✓ This welcomed business from all corners of the world, dubbing the Philippines as the center
for commerce in the East.

- The Spanish Colonization introduced the Philippines to the world by the Tobacco Monopoly in
1782 and the Galleon Trade through the Manila-Acapulco Trade

- The Spanish Colonization introduced the Philippines to the world by the Tobacco Monopoly in
1782 and the Galleon Trade through the Manila-Acapulco Trade

- The Spanish Colonization introduced the Philippines to the world by the Tobacco Monopoly in
1782 and the Galleon Trade through the Manila-Acapulco Trade

- The Spanish Colonization introduced the Philippines to the world by the Tobacco Monopoly in
1782 and the Galleon Trade through the Manila-Acapulco Trade

- Other International Trade of the Philippines during the Spanish Regime

1. Japan

2. Siam (Thailand)

3. Cambodia

4. Burma (Myanmar)

5. Sumatra – Indonesia

6. Java – Indonesia

7. Other neighboring island countries

8. Countries in Europe and Africa through the Manila-Acapulco Trade

- The American Colonization (circa 1898 – 1946) opened the ports of Manila and Cebu promoting
Free Trading for more goods to be transported to the United States of America
- The Payne-Aldrich Act in 1909 paved the way for free entry of US goods to the Philippines and
local goods to the US, no taxes and tariffs.
- The American Colonization (circa 1898 – 1946) opened the ports of Manila and Cebu promoting
Free Trading for more goods to be transported to the United States of America
- The Bell Trade Act of 1946 – giving the Americans the right to conduct business and avail of our
natural resources… e.g. ”The USA-Philippine Sugar Quota”
- The Philippine Commonwealth and The Republic (1934 - 1946) Under the Tydings-McDuffie Law
giving the Philippines its Independence in July 4, 1946 with Manuel Roxas as President of the
new republic
- Import, Export and Foreign Exchange Control – to give rise to the new country and expand its
international trade and relation to countries in Asia, Americas, Europe, Africa, Middle East and
the rest of the world
- The New Republic (1960 - Present) Under the presidency of Diosdado Macapagal in 1961-1965
and Ferdinand E. Marcos from 1965 – 1986.
- The Golden Era of Philippine Trade and Economy – major economic agenda and projects under
the KBL or the New Society Movement….focusing on Agricultural Development, Manufacturing
and Economic Development, Infrastructure Development (airports, seaports, roads,
expressways, train, bridges), Health and Wellness, Education and Knowledge, Rural & Urban
Development

 Economic development – established programs and economic reforms to improve the country’s
economic landscape
1. Export / trade / investment development program
creation of economic zones in CALABARZON – cavite, laguna, Batangas regional zone,
baguio, cebu/mactan, Iloilo, Cagayan de oro, davao
2. Massive infrastructure projects to support investments and trade in the country such as:
a. Airports – all over the country CIA
b. Seaports
c. Train
d. Bridges
e. Roads, highways and expressways
f. Power and water infrastructure
g. Transportation and communications
- To make the Philippines attractive to FDIs

 Agricultural Development - prioritized the development of the Agriculture sector as the

producer of food and wanted to make the Philippines as the Food Basket of Asia
1. Masagana 99 or the Green Revolution Program Launched in 1970, the movement aspires to
have the farmers increase their production using modern methods of irrigation, infrastructure
buildup, and input increases for food sufficiency
 2. Gintong Ani Program - Gintong Ani promotes proper agricultural practices and processes to
increase agricultural productivity in the country
3. Masaganang Maisan, Maisagana and Explanded
Yellow Corn Program
4. Bakahang Barangay/Poultry and Livestock Program
5. Blue Revolution Program
6. Barangay Brigades Development Program
7. Gulayan sa Kalusugan and Pagkain ng Bayan
Programs

 Established Hospitals and Medical Institutions to make Manila as the Health Capital of Asia

➢ Heart Center of the Philippines

➢ Kidney Center of the Philippines

➢ Lung Center of the Philippines

➢ Manila Children’s Hospital

➢ Philippine Veteran’s Hospital

➢ Provincial and Municipal Hospitals as well as Rural Health Centers across the country

 Established and constructed various convention and conference centers to make Manila as the
Convention Capital of Asia / Hub of Culture and the Arts in Asia

➢ Philippine International Convention Center

➢ Cultural Center of the Philippines

➢ Folk Arts Theater

➢ Manila Film Center to host the Manila International Filmfest

➢ Makiling Center for the Arts (National Arts Center)

➢ Manila Metropolitan Theater

➢ Nayong Pilipino

➢ National Museum in the Philippines

➢ Museum of the Filipino People

➢ Museo Pambata

 Establishment of a Stable Energy to fuel the country’s bid for Industrialization and Urbanization
➢ Bataan Nuclear Power Plant – 700 Megawatts

➢ Leyte Geothermal Power Plant

➢ Makiling-Banahaw Geothermal Power Plant

➢ Tiwi Geothermal Power Plant

➢ Angat Hydro Electric Power Plant

➢ Kalayaan Hydro Power Plant

➢ Magat A Hydro Power Plant

➢ Magat B Hydro Power Plant

➢ Pantabangan Hydro Power Plant

➢ Palinpinon Geothermal Power Plant

➢ And 10 other Hydro and Geothermal Power Plants in the Country

 Other Notable Projects of the Marcos Administration

➢ Construction of one of the biggest and most modern Airport Terminal in Asia, the Manila
International Airport in 1979

➢ Construction of Cebu International Airport and Terminal

➢ Other national and domestic airports in the country, Davao, Baguio, Cagayan de Oro, Iloilo, Bacolod,
Leyte, Ilocos Norte, Dumaguete etc…

➢ The first Metro Rail Transit in Southeast Asia, earlier established that Singapore, the Manila Light
Transit System

➢ Expansion of the Manila South Harbor Port, the biggest in Asia then to improve cargo traffic to and
from the Philippines

➢ Leasing of the Subic Naval Base and Clark Air Base to the Americans

 Philippines Entry to the General Agreement on Tariffs and Trade

– The Philippines became a member of the GATT in December 27, 1979.

  Philippines then became a member of the World Trade Organization (WTO)

– in January 1, 1995 and participated in the WTO review to improve its purpose, objectives and other
changes in December 5, 2005.

International Business and Trade

 Any business that crosses the national borders of a country. It includes importing and exporting;
the international movements of goods, services, employees, technology, licensing, and
franchising of intellectual property (trademarks, patents, copyrights etc…)
 International business also includes investment in financial and fixed or immovable assets in
foreign countries.
 Contract manufacturing or assembly of products for local sale or for exports to other countries,
the establishment of foreign warehousing and distribution systems, and import of goods from
one foreign country to a second foreign country for local sale is part of international business
and trade.

✓ Apart from individual firms, governments and international agencies may also get involved in
international business transactions.

✓ Companies and countries may exchanged different types of PHYSICAL and INTELLECTUAL Assets

✓ These assets can be

- natural resources

- products and services,

- capital, technology,

- knowledge and labor or human resource

✓ These are all vital ingredients to improve the productive capacity of an economy to be globally
competitive

APPLE Inc.

 Product Development: Silicon Valley, San Jose, California, USA

 Manufacturing and Assembly: Shenzhen, Zhengzhou, Shanghai, Kunshan, Chongqing, Suzhou,
China (12 plants in China)
  Other Parts are outsourced : Display, Application Processor, Memory, Modem, Camera, Flash,
Wi-Fi Chip etc…Germany, Japan, South Korea, Italy, Brazil and Taiwan
 Marketing and Distribution: Apple Headquarters, Silicon Valley, San Jose, California
 Apple Company Store – 29% of total distribution - 509 Stores Worldwide – 271 in the US Third
Party Stores – 71% - Cellular Network Stores, Wholesalers, Retailers, Resellers
 # of Iphones sold (all time) = 1.2 billion Total Apple Active Devices Worldwide = 1.4 billion 2018
Global Sales - US$ 18-B

14 Car Companies control a combined 54 brands

 Toyota, inspired by the new mass-production methods in Europe and the USA have grown to
become one of the world’s largest and best-known automobile manufacturing businesses.
 We employ more than 360,000 people and make vehicles in factories on every continent.
 Our cars and trucks are sold in more than 170 countries and territories.

Jaxa Lunar Rover Project

 Toyota and Japanese space agency, JAXA, are working together on a hydrogen-powered rover to
help humanity explore the surface of the moon, and some day Mars too.
 Global -54 top 25 brands and models 2018

 Brands
 The factors of production
  Import versus export

 Global services – mode

Scope of International Business and Trade

1. Global Integration of Business

 To promote businesses in the global integration in the fields:
1. Trade (international trading)
2. Investments (off-shore branching)
 3. Factor of Productions ( 3 M’s)
4. Technology (systems and processes)
5. Communications (distribution & marketing)

2. Import and Export

❖ The fundamental and the largest international business activity in many countries in foreign
trade.
❖ Physical goods/commodities or merchandise leave the country in the form of exports.
❖ Those goods brought across the national borders into a country are import goods and
commodities

3. Global Services Promote the growth of global services that supports import and export
transactions, such as:
❖ Banking services
❖ Insurances
❖ Import and Export Consulting
❖ Trademark and Patents
❖ Transportation
❖ Warehousing
❖ Distribution and Marketing
❖ Manpower support services

4. Portfolio Investment
❖ Portfolio investments are financial investments made in foreign countries. The investor
purchases equity in the expectation of financial return on the investment
❖ Portfolio investments can span a wide range of asset classes such as stocks, government
bonds, corporate bonds, Treasury bills, real estate investment trusts (REITs), exchange-traded
funds (ETFs), mutual funds and certificate of deposit

5. Foreign Direct Investment

❖ A foreign direct investment (FDI) is an investment made by a firm or individual in one country
into business interests located in another country.
❖ Generally, FDI takes place when an investor establishes foreign business operations or
acquires foreign business assets in a foreign company.
❖ It is also known as “Fixed Investment” wherein they have to build their manufacturing firm or
office, hire people, transfer of technology and improve the skills of locals

Total Economic Zones in the Philippines

 ❖ 74 Manufacturing Economic Zones
❖ 262 Information Technology Parks/Centers
❖ 22 Agro-Industrial Economic Zones
❖ 19 Tourism Economic Zones
❖ 2 Medical Tourism Parks/Centers

 One global economy (free entry and exit)

Brief History of International Business and Trade

- International trade has a rich history starting with Barter System and being
replaced by Mercantilism in the 16th and 17th Centuries.

- The 18th Century saw the shift towards liberalism. It was in this period
that Adam Smith, the father of Economics wrote the famous book ‘The Wealth of
Nations’ in 1776 where in he defined the importance of specialization in
production and brought International trade under the said scope. Led the
growth of Industrial Revolution.

- In the beginning of the 19th century saw the move towards trade
professionalism, which petered down by end of the century. In the early start
of the century, countries in the west came up with extensive move towards
economic liberty where in quantitative restrictions were done away with and
customs duties were reduced across countries.

- Establishing business anywhere and finding employment was easy and one can
say that trade was really free between countries around this period.

- The 1st and 2nd World Wars changed the entire course of the world trade and
countries built walls around themselves with wartime controls. Post world war
- as many as five years went into dismantling of the wartime measures and
getting back trade to normalcy.

- However, due to economic shocks and recessions that led to fluctuations and
depreciation of currencies after the 2nd World War, government were pressured
to adopt protective mechanism by raising custom duties and or trade tariffs to
achieve economic growth.

- The need to reduce the pressures of economic conditions and ease

international trade between countries gave rise to the World Economic
Conference organized by League of Nations where in the most important
industrial countries participated and led to drawing up of Multilateral Trade
Agreement. This was later followed with the General Agreement of Tariffs and
Trade (GATT) in 1947.

- Multilateral Trade Agreement is a trade agreement between more than 2

countries intended to lower tariffs and barriers among

- The General Agreement on Tariffs and Trade (GATT) is a legal agreement

between many countries, whose overall purpose was to promote international
trade by reducing or eliminating trade barriers such as tariffs or quotas over
a period of time from April 1947 to December 1993.

Objectives of GATT
1. To provide equal opportunities to all countries in international market for
trading
2. To increase the effective demand for real income growth and goods
3. To minimize tariffs on trade ensuring mutual benefit
4. To provide proper solution to the disputes related to international trade
5. 5. To ensure a better living standards as a whole

GATT general agreement on tariffs and trade

- Today, the understanding of international trade and the factors influencing
global trade is much better understood.

- The context of global markets have been guided by the understanding and
theories developed by economists based on Natural resources available in
various countries which give them the comparative advantage, Economies of
Scale of large scale production, technology in terms of e commerce as well as
product life cycle changes in tune with advancement of technology as well as
the financial market structures.

Timeline of international business and trade

Philippines Entry into the International Business and Trade

Barter System – the old method of exchange of goods and or services with our
neighbors such as the Chinese, Malays and Indians (from India). Products from
the Philippines exchanged were rice, coconuts,, palm oil, sugar, fibers,
straws, cane, dyewoods, lumber, snails, beeswax, medicinal plants, tortoise
shell, pearls and mother of pearl shells etc… while the Chinese brough in
cotton, linen, silk, porcelain, iron, household utensils and other crude
manufactured wares

- records show that chinese merchants came to the Philippines to trade

porcelain, silk and metalware in exchange for gold, pearls, beeswax and
medicianl plants, which the philippines is naturally rich in.

-The Spanish Colonization introduced the Philippines to the world with the
Tobacco Monopoly in 1782 and the Galleon Trade through the Manila-Acapulco
Trade

- In 1565, the Spaniards marked their first settlement in Cebu when they
sought to acquire a share in the lucrative spice trade.

- When the King of Spain abolished the Royal Company of the Philippines, it
opened the port Manila to global trade.
- This welcomed business from all corners of the world, dubbing the
Philippines as the center for commerce in the East.

- The Spanish Colonization introduced the Philippines to the world by the

Tobacco Monopoly in 1782 and the Galleon Trade through the Manila-Acapulco
Trade

- The Spanish Colonization introduced the Philippines to the world by the

Tobacco Monopoly in 1782 and the Galleon Trade through the Manila-Acapulco
Trade
- The Spanish Colonization introduced the Philippines to the world by the
Tobacco Monopoly in 1782 and the Galleon Trade through the Manila-Acapulco
Trade

- The Spanish Colonization introduced the Philippines to the world by the

Tobacco Monopoly in 1782 and the Galleon Trade through the Manila-Acapulco
Trade

- Other International Trade of the Philippines during the Spanish Regime

1. Japan
2. Siam (Thailand)
3. Cambodia
4. Burma (Myanmar)
5. Sumatra – Indonesia
6. Java – Indonesia
7. Other neighboring island countries
8. Countries in Europe and Africa through the Manila-Acapulco Trade
- The American Colonization (circa 1898 – 1946) opened the ports of Manila
and Cebu promoting Free Trading for more goods to be transported to the United
States of America

- The Payne-Aldrich Act in 1909 paved the way for free entry of US goods to
the Philippines and local goods to the US, no taxes and tariffs.

- The American Colonization (circa 1898 – 1946) opened the ports of Manila
and Cebu promoting Free Trading for more goods to be transported to the United
States of America

- The Bell Trade Act of 1946 – giving the Americans the right to conduct
business and avail of our natural resources… e.g. ”The USA-Philippine Sugar
Quota”

- The Philippine Commonwealth and The Republic (1934 - 1946) Under the
Tydings-McDuffie Law giving the Philippines its Independence in July 4, 1946
with Manuel Roxas as President of the new republic

- Import, Export and Foreign Exchange Control – to give rise to the new
country and expand its international trade and relation to countries in Asia,
Americas, Europe, Africa, Middle East and the rest of the world

- The New Republic (1960 - Present) Under the presidency of Diosdado Macapagal
in 1961-1965 and Ferdinand E. Marcos from 1965 – 1986.

- The Golden Era of Philippine Trade and Economy – major economic agenda and
projects under the KBL or the New Society Movement….focusing on Agricultural
Development, Manufacturing and Economic Development, Infrastructure
Development (airports, seaports, roads, expressways, train, bridges), Health
and Wellness, Education and Knowledge, Rural & Urban Development

- Economic Development – established programs and economic reforms to improve

the country’s economic landscape

1. Export /Trade/Investment Development Program - creation of Economic Zones

in CALABARZON – Cavite, Laguna, Batangas Regional Zone, Baguio, Cebu/Mactan,
Iloilo, Cagayan de Oro, Davao
2. Massive Infrastructure Projects to support investments and trade in the
country such as: a. Airports - all over the country CIA b. Seaports c. Train
d. Bridges e. Roads, Highways and Expressways f. Power and Water
Infrastructure g. Transportation and Communications

- To make the Philippines attractive to FDIs

- Agricultural Development - prioritized the development of the Agriculture
sector as the producer of food and wanted to make the Philippines as the Food
Basket of Asia
1. Masagana 99 or the Green Revolution Program Launched in 1970, the movement
aspires to have the farmers increase their production using modern methods of
irrigation, infrastructure buildup, and input increases for food sufficiency
2. Gintong Ani Program - Gintong Ani promotes proper agricultural practices
and processes to increase agricultural productivity in the country
3. Masaganang Maisan, Maisagana and Explanded Yellow Corn Program
4. Bakahang Barangay/Poultry and Livestock Program
5. Blue Revolution Program
6. Barangay Brigades Development Program
7. Gulayan sa Kalusugan and Pagkain ng Bayan Programs

- Established Hospitals and Medical Institutions to make Manila as the Health

Capital of Asia
➢ Heart Center of the Philippines
➢ Kidney Center of the Philippines
➢ Lung Center of the Philippines
➢ Manila Children’s Hospital
➢ Philippine Veteran’s Hospital
➢ Provincial and Municipal Hospitals as well as Rural Health Centers across
the country

- Established and constructed various convention and conference centers to

make Manila as the Convention Capital of Asia / Hub of Culture and the Arts in
Asia
➢ Philippine International Convention Center
➢ Cultural Center of the Philippines
➢ Folk Arts Theater
➢ Manila Film Center to host the Manila International Filmfest
➢ Makiling Center for the Arts (National Arts Center)
➢ Manila Metropolitan Theater
➢ Nayong Pilipino
➢ National Museum in the Philippines
➢ Museum of the Filipino People
➢ Museo Pambata
- Establishment of a Stable Energy to fuel the country’s bid for
Industrialization and Urbanization
➢ Bataan Nuclear Power Plant – 700 Megawatts
➢ Leyte Geothermal Power Plant
➢ Makiling-Banahaw Geothermal Power Plant
➢ Tiwi Geothermal Power Plant
➢ Angat Hydro Electric Power Plant
➢ Kalayaan Hydro Power Plant
➢ Magat A Hydro Power Plant
➢ Magat B Hydro Power Plant
➢ Pantabangan Hydro Power Plant
➢ Palinpinon Geothermal Power Plant
➢ And 10 other Hydro and Geothermal Power Plants in the Country

- Other Notable Projects of the Marcos Administration

➢ Construction of one of the biggest and most modern Airport Terminal in
Asia, the Manila International Airport in 1979
➢ Construction of Cebu International Airport and Terminal
➢ Other national and domestic airports in the country, Davao, Baguio, Cagayan
de Oro, Iloilo, Bacolod, Leyte, Ilocos Norte, Dumaguete etc…
➢ The first Metro Rail Transit in Southeast Asia, earlier established that
Singapore, the Manila Light Transit System
➢ Expansion of the Manila South Harbor Port, the biggest in Asia then to
improve cargo traffic to and from the Philippines
➢ Leasing of the Subic Naval Base and Clark Air Base to the Americans

- Philippines Entry to the General Agreement on Tariffs and Trade – The

Philippines became a member of the GATT in December 27, 1979.

- Philippines then became a member of the World Trade Organization (WTO) – in

January 1, 1995 and participated in the WTO review to improve its purpose,
objectives and other changes in December 5, 2005.

Features of International Business and Trade

1. Large Scale Operations

❖ To cope up with the needs of the global market and consumers; production
operations must be large scale, using special purpose machinery and highly
skilled labor
❖ Marketing and Distribution activities are also large scale
❖ MNCs must satisfy first the local or domestic market and then global
distribution of their products

✓ Large scale production or mass production means the production of items on

large scale employing very specialized machines and processes.

✓ All specialized machines and processes are arranged in operation sequence

to suit the product.

✓ Closely organized mass labor composed of thousands of individuals,

cooperating with large quantities of expensive and intricate machinery through
which pass a continuous and mighty volume of raw material on its journey to
the hands of the consuming public.

Characteristics of Large Scale Production

1. Large Quantities of Materials
2. Very Specialized Machinery
3. Huge and Highly Specialized Labor Force
4. Efficient and Effective Organizations / MNCs
5. Huge Financial Capitalization

*** current market outlook

*** unilever owns over 400 brands

*** 13 brands with sales of over 1 billion Euros.
 2. Immobility Factors
❖ The degree of immobility of factors such as financial capital, machines,
materials and most importantly labor are greater between countries that within
a country due to various regulations
❖ Immigration laws, citizenships, skills and qualifications slows down the
international mobility of labor
❖ International flow of financial capital are also prohibited and severely
limited due to fiscal policies differences

3. Heterogeneous Markets
❖ A cross-border business is very different from one that involves a single
country
❖ Differences in climate, language, culture, preferences, customs and habits,
likes and dislikes etc…
❖ Behavior of international clients over local/domestic are way different…
❖ Socio-economic environment differs greatly among different nations

4. Integration of Economies
❖ Trade arrangement between nations in a region that includes reduction or
elimination of trade barriers, and coordination of monetary and fiscal
policies
❖ 7 Stages of Economic Integration
1. Preferential Trading Area
2. Free Trade Area
3. Customs Union
4. Common Market
5. Economic Union
6. Economic and Monetary Union
7. Complete Economic Union

*** economic integration

 5. Domination of Highly Industrialized Countries and MNCs
❖ International business is dominated by large countries and their
multinational corporations (MNCs). MNCs encompass a number of countries
❖ MNCs have large financial and other resources, technology, research and
development facilities, modern machines, equipment and production facilities,
highly skilled employees and managers…they produce quality goods and services
at low prices
❖ They have dominance in the world market

*** worlds some important non-financial multinational corporation

*** philippines top 30 companies

6. Keen Competition
❖ International business increases competition in domestic markets and
introduces new opportunities to foreign markets
❖ Global competition however encourages innovation, creativity and efficient
use of resources for greater productivity
❖ However, there is unequal competition between developed and developing
countries

7. Beneficial to Participating Countries

❖ International business gives benefits to participating countries
❖ Developing countries get financial capital and technology from developed
countries
❖ They get rapid industrialization
❖ They get more employment opportunities
❖ They get economic development if they open their economy through liberal
economic policies

*** benefits of internation trade - gains and benefits

8. Special Role of Science and Technology

❖ International business gives a lot of importance to Science and Technology
and use high technology to dominate global trade
❖ It helps transfer such top high-end technologies to developing countries
and help people improve their skills and to be competitive
❖ It gives people the opportunity to be trained and unlock the door to
entrepreneurship

9. Reduction/Elimination of Trade Barriers and Restrictions

❖ International business faces many restrictions on the inflow and outflow of
inputs, technology, goods and services
❖ Trade restrictions are: tariffs, quotas, embargoes, licensing requirements,
standards, and subsidies
❖ GATT and WTO reduced tariffs and trade restrictions to enable more
countries explore their comparative advantage – a new economic age called
GLOBALIZATION
❖ FTAs and RTA abolished their barriers to promote globalization

*** what is economic globalization?

 10. Different Policies and Different Countries
❖ Economic and political policies differ from one to country to another.
Policies related to trade, commerce, export and import, taxation, etc., also
differ widely among countries.
❖ The need to harmonize economic and political policies are important so to
achieve a freer international business and trade
❖ The idea of establishing FTAs and RTAs is a prelude to harmonizing these
policies and eventually promote the so-called “One Global Economy”, the
economy of the future.

*** globalisation