David Chapter 01 mod

David Chapter 01 mod - Chapter 1 INTRODUCTION LEARNING...

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Chapter 1 I NTRODUCTION LEARNING OBJECTIVES At the end of this chapter, the student should: 1 Recognize the exponential growth in recent decades of international trade and reasons for it. 2 Have a basic idea on ancient and recent historical developments in the practice of logistics. 3 Know the basic definitions of logistics and international logistics. 4 Know the basic components of international logistics. 5 Recognize the economic impact of international logistics activities. PREVIEW This chapter lays the foundation of international trade, by reviewing its remarkable growth since the mid-twentieth century, as well as identifying the “main players” in world trade. An important foundation of this course is to understand the nature of international trade and why it is beneficial to countries; it therefore reviews the traditional trade drivers (cost, competition, market and technology) as well as the main theories of international trade: the classic absolute advantage, comparative advantage and factor endowment, but also the International Product Life Cycle and the cluster theory. Finally, the chapter closes on a description of the international business environment.
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Chapter 1 Introduction 1-2 CHAPTER OUTLINE 1-1 International Trade Volume I. International Trade has grown 2400% from 1050 to 2005 a. Grew from $84 billion per year to $7,342 billion b. Merchandise trade tripled from $2028 billion in 1980 to $6642 billion in 2004 c. Services trade sextupled from 365 billion in 1980 to $2125 billion in 2004. II. Institutions facilitated international trade. III. Reduction in transportation costs and transit times IV. Greater acceptance of “things foreign” 1-2 International Trade Milestones I. Development of important treaties and organizations a. Bretton-Woods Conference, July 1944, created International Monetary Fund (1945). i. International payment system ii. Stable currency exchange rates b. General Agreement on Tariffs and Trade (GATT), 1949–94, resulted in gradual reduction of average tariff from over 40% in 1947 to about 4% in 2002. c. World Trade Organization, January 1995 i. Replaces GATT ii. Enforces free trade II. Treaty of Rome, 1957, forerunner of European Union III. The creation of other trade blocs (NAFTA in particular) IV. Introduction of Euro as currency, 2002 1-3 Largest Exporting and Importing Countries I. Mostly a review of the table, with an emphasis on the relative ranks of the United States as an exporter (third after Germany and the European Union as a whole) and as an importer (first, in front of the European Union and Germany).
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David Chapter 01 mod - Chapter 1 INTRODUCTION LEARNING...

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