Promotion of Global Business

y International Promotion - Promotion policy. Global, regional or local strategies. - Promotion strategy when entering new export markets. - Direct and indirect promotion. - Promotion campaign. Brochures and catalogs. - Advertising & publicity. - Public relations. y Country image - The concept of country brand. - The influence of country image in global marketing. - Case study: the image of the Spain Brand.

y A business trip - International Business Travel. - Organisation of the trip. - The international sale. - Post-trip activities. y International fairs - A key aspect of International Marketing. - Objectives of participation. - Preparation and organization of international fairs. - Trade fairs in the world.

y e-Promotion. - Key concepts of e-Promotion. - Promoting online effectively. - Search Engine Positioning.

Role of GATT/WTO

The World Trade Organization ( WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries; it provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (19861994). The organization is currently endeavoring to persist with a trade negotiation called the Doha Development Agenda (or Doha Round), which was launched in 2001 to enhance equitable participation of poorer countries which represent a majority of the world's population. However, the negotiation has been dogged by "disagreement between exporters of agricultural bulk commodities and countries with large numbers of subsistence farmers on the precise terms of a 'special safeguard measure' to protect farmer s from surges in imports. At this time, the future of the Doha Round is uncertain." The WTO has 153 members, representing more than 97% of total world trade and 30 observers, most seeking membership. The WTO is governed by a ministerial conference, meetin g every two years; a general council, which implements the conference's policy decisions and is responsible for day -to-day administration; and a director -general, who is appointed by the ministerial conference. The WTO's headquarters is at the Centre William Rappard, Geneva, Switzerland. Among the various functions of the WTO, these are regarded by analysts as the most important:
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It oversees the implementation, administration and operation of the covered agreements. It provides a forum for negotiations and for settling disputes.

Additionally, it is the WTO's duty to review and propagate the national trade policies, and to ensure the coherence and transparency of trade policies through surveillance in global economic policy -making. Another priority of the WTO is the assistance of developing, least-developed and low-income countries in transition to adjust to WTO rules and disciplines through technical cooperation and training. The WTO is also a center of economic research and analysis: regular assessments of the global trade picture in its annual publications and research reports on specific topics are produced by the organization. Finally, the WTO cooperates closely with the two other componen ts of the Bretton Woods system, the IMF and the World Bank.

Multilateral trade Negotiations and Agreements International Trade Negotiation

Negotiations lie at the heart of international diplomacy. Parties (governments, businesses, and nongovernmental organizations) employ the art and science of negotiation to protect and advance their organizational and constituent interests. The skillful use of negotiation can advance a partys interests and help to avoid a less attractive alternative, e.g., trade wars, litigation, or protracted dispute settlement procedures under the WTO. An effective negotiation process can lead to positive outcomes tha t can result in the promotion of important international objectives including economic development, business interests, environmental protection, labor rights, and political stability, all of which can minimize the adverse impacts of poverty that can lead to violence and war. A first step in approaching the improvement of your own negotiating technique is to develop an awareness or mindfulness of when you are engaged in a negotiation of small or large consequence. Many people undercut their own self-interest by not paying attention to their own role and participation in day to day negotiating scenarios.

A free trade agreement (FTA) is a trade treaty between two or more countries. Usually these agreements are between two countries and are meant to reduce or completely remove tariffs to trade. According to the World Trade Organization there are more than 200 FTAs in force.
[1]

Most FTAs are between two

individual countries; however, agreements can be reached between a trade bloc

and an individual country such as the European Union-Chile free trade agreement. [1] The number of FTA has increased significantly over the last decade. Between 1948 to 1994, the General Agreement on Tariffs and Trade (GATT), the predecessor to the WTO, received 124 notifications. Since 1995 over 300 trade agreements have been enacted.
[2]

Depending on the subject matter of a negotiation, different skills must be employed and options exercised to achieve agreement between or among parties. International negotiations in the broad context of trade relations may include negotiations over prices, tariffs, and sales or qualit ative negotiations over broad principles related to the environmental, labor, health & safety, or other impacts of trade related agreements. The purpose of this manual is to provide the reader and practitioner with the following analytical and practica l skills:
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Problem identification and development of negotiation goals and strategies

Identification of parties (stakeholders) and their respective interests and priorities

Development of multiple options (solutions) that will maximize the probability of positive outcomes for all parties to the process

Development of specific skills in the following areas:

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Negotiation strategy Pre-negotiation research and planning Negotiation skills and technique to be employed throughout the negotiation process

Crafting and drafting durable agreements with an emphasis on successful implementation of the agreement

The Role and Development of Negotiations in Commercial Diplomacy

Before exploring the other elements of interest -based negotiations, it is essential to describe the range of negotiations that occur in the international and trade arenas. There are profound differences in the subject matter negotiated in international trade and investment in the character of the negotiations, as well as in the level and formality of various levels of negotiations. These differences have important implications for the optimal choice of negotiating strategies. Terminology and descriptions of the various types of parties and form of negotiation follow: 1)
Inter-governmental negotiations between governments the

government of Pakistan negotiates with the government of India 2)

Intra-governmental negotiations within and among one

government, usually between government agencies, political parties, or with constituent groups. 3)
Commercial negotiations between businesses, companies,

corporations. This may include business negotiations related to contracts, sales agreements, investments, joint ventures, etc. Or, may involve negotiations within a business or trade association. 4)
Internal business negotiations Within the business organization,

company or corporation. Examples: management labor negotiations, human resources, inter-departmental, union negotiations, e tc.

5)

Nongovernmental Organizations (NGOs) -business associations,

trade associations, environmental, labor, human rights, development, etc.) Intra-group (within the NGO ) a) b) c) d) Inter-group between and among other NGOs NGO-business organization NGO-governmental organization NGO-international governmental body (WTO, UN, WHO,

ASEAN, etc)

Differences in Players, Resources, Styles, and Motivations With each identified type of negotiation and potential interest group involvement there will emerge different negotiating styles, techniques, and cultures. It stands to reason that groups of like-function (government to government) will employ more similar negotiating styles and protocols than groups that cross functional, experiential, and interest-based lines of demarcation. As groups cross from negotiations with familiar counterparts to dissimilar counterparts, the cadence of the negotiating dance will more likely be dissonant. In other words, people feel more comfortable negotiating with counterparts performing a similar role and dealing with like subject matter than with those representing different subject, professional, and cultural differences.

It is one thing to acknowledge the differences inherent in a cross -over in negotiating with a group of different interest and professional focus it is quite another to adapt ones negotiating style and technique to accommodate or at least function with negotiators of diverse interest groups. As discussed, supra, a diplomatic culture exists among officials representing various governments. While language, background, and cultural differences may exist, the diplomatic culture plays upon common experience, educational training, and acceptance of protocols developed over decades so that negotiators can work with one another in an atmosphere that is predictable and based upon certain accepted norms, routines, and behaviors. While the subject of a trade dispute may not change, the parties to negotiations may vary from governmental representatives meeting with each other one day and those same representatives meeting with a cast of business or NGO representatives the next.

Challenges of Global Business

Several businesses today are global businesses too and with the increase of technology and real time experiences on the internet conducting global business has become simpler than ever. All the aspects of global business like interacting with people, business planning, holding conferences and communication happens on the internet and not at the actual location. Since we are talking about international business here we would like to believe that the other end of the busin ess is located in a fast developing country and not in third world. Every business has its difficulties and presents is own challenges in when it comes to operating it successfully. For example, the nature of business may not be accepted openly in the tar geted country because of cultural differences. Also, international businesses face several restrictions like acceptance, usability, application of the product locally and customer service issues. Even though English is a very popular language it is in the end spoken only in a few countries as a primary language. Some of the people in other countries have never uttered a single word in English their entire lives. So the company which is starting a business in such a place should have a contingency plan where they can provide service in their language for example. If a company can cross over the language and cultural barriers, then most of their blocks have been cleared. Also the business ethics matter and the any international organization cannot have standar d ethics that apply globally. They have to be changed and altered.

Theories of International Trade and Investment

In the 1600 and 1700 centuries, mercantilism stressed that countries should simultaneously encourage exports and discourage imports. Although mercantilism is an old theory it echoes in modern politics and trade policies of many countries.
Mercantilism

According to Wild, 2000, the trade theory that states that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports is called mercantilism. According to this theory other measures of countries ' well being, such as living standards or human development, are irrelevant.
Absolute Advantage

The Scottish economist Adam Smith developed the trade theory of absolute advantage in 1776. A country that has an absolute advantage produces greater output of a good or service than other countries using the same amount of resources.
Comparative Advantage

The most basic concept in the whole of international trade theory is the principle of comparative advantage, first introduced by David Ricardo in 1817. It remains a major influence on much international trade policy and is therefore important in understanding the modern global economy.
Heckscher-Ohlin Theory

In the early 1900s an international trade theory called factor proportions theory emerged by two Swedish economists, Eli Heckscher and Bertil Ohlin. This theory is also called the Heckscher -Ohlin theory. The Heckscher-Ohlin theory stresses that countries should produce and export goods that require resources (factors) that are abundant and import goo ds that require resources in short supply.

Product Life Cycle Theory

Raymond Vernon developed the international product life cycle theory in the 1960s. The international product life cycle theory stresses that a company will begin to export its product and later take on foreign direct investment as the product moves through its life cycle. Eventually a country's export becomes its import. Although the model is developed around the U.S, it can be generalised and applied to any of the developed and inno vative markets of the world.

Need for Global competitiveness

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y y y y y

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Technology is expanding, especially in transportation and communications. Governments are removing international business restrictions. Institutions provide services to ease the conduct of international business. Consumers know about and want foreign goods and services. Competition has become more global. Political relationships have improved among some major economic powers. Countries cooperate more on transnational issues. Cross-national cooperation and agreements .

Regional Trade Blocks Trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization , where regional barriers to trade (tariffs and non-tariff barriers) are reduced or eliminated among the participating states. [1]

One of the first economic blocs was the German Customs Union (Zollverein) initiated in 1834, formed on the basis of the German Confederation and subsequently German Empire from 1871. Surges of trade bloc formation were seen in the 1960s and 1970s, as well as in the 1990s after the collapse of Communism. By 1997, more than 50% of all world commerce was conducted under the auspices of regional trade blocs. [2] Economist Jeffrey J. Scott of the Peterson Institute for International Economics notes that members of successful trade blocs usually share four common traits: similar levels of per capita GNP, geographic proximity, similar or compatible trading regimes, and political commitment to regional organ ization. [3] Advocates of worldwide free trade are generally opposed to trading blocs, which, they argue, encourage regional as opposed to global free trade. [4] Scholars and economists continue to debate whether regional trade blocs are leading to a more fragmented world economy or encouraging the ex tension of the existing global multilateral trading system. [5][6] Trade blocs can be standalone agreements between several states (such as the North American Free Trade Agreement (NAFTA) or part of a regional organization (such as the European Union). Depending on the level of economic integration, trade blocs can fall into different categories, such as: [7] preferential trading areas, free trade areas, customs unions, common markets and economic and monetary unions .

List of trade blocs

South Asian Association for Regional Cooperation

The South Asian Association for Regional Cooperation (SAARC ) is an economic and political organization of eight countries in Southern Asia. It was established on December 8, 1985 by Bangladesh, Bhutan, Maldives, Nepal, Pakistan, India and Sri Lanka. In April 2007, at the Association's 14th summit, Afghanistan became its eighth member.
ASEAN

The Association of Southeast Asian Nations commonly abbreviated ASEAN. Its aims include the acceleration of economic growth, social progress, cultural development among its members, the protection of the peace and stability of the region, and to provide opportunities for member countries to discuss differences peacefully. [6] ASEAN spans over an area of 4.46 million km 2 with a population of approximately 580 million people, 8.7% of the world population. In 2009, its combined nominal GDP had grown to more than USD $1.5 trillion. [7] If ASEAN was a single country, it would rank as the 9th largest economy in the world in terms of nominal GDP.
European Union

The European Union (EU) is an economic and political union of 27 member states,[7] located primarily in Europe. Committed to regional integration, the EU was established by the Treaty of Maastricht in 1993 upon the foundations of the European Communities.[8] With over 500 million citizens, [9] the EU combined generated an estimated 28% share (US$ 16.5 trillion) of the nominal and about 21% (US$14.8 trillion) of the PPP gross world product in 2009.[10] The EU has developed a single market through a standardised system of laws which apply in all member states, and ensures the free movement of people, goods, services, and capital,[11] including the abolition of passport controls by the Schengen Agreement between 22 EU and 3 non-EU states.[12] It maintains common policies on trade, [13] agriculture, fisheries[14] and regional development.[15] Sixteen member states have adopted a common currency, the euro, constituting the eurozone.
APEC Asia-Pacific Economic Cooperation (APEC) is a forum for 21 Pacific Rim countries (styled "Member Economies") to cooperate on regional trade and

investment liberalisation and facilitation. APEC's objective is to enhance economic growth and prosperity in the region and to strengthe n the Asia-Pacific community. Members account for approximately 40% of the world's population, approximately 54% of world GDP and about 44% of world trade. [1] An annual APEC Economic Leaders' Meeting, attended by the heads of government of all APEC members, except the Republic of China (Taiwan) which is represented under the name Chinese Taipei by a ministerial-level official. The location of the meeting rotates annually among the member economies, and a famous tradition in volves the attending Leaders dressing in a national costume of the host member.

RTBs across the Globe- Brief History

Traditionally trade was regulated through bilateral treaties between two nations. For centuries under the belief in mercantilism most nations had high tariffs and many restrictions on international trade. In the 19th century, especially in the United Kingdom, a belief in free trade became paramount. This belief became the dominant thinking among western nations since then. In the years since the Second World War, controversial multilateral treaties like the General Agreement on Tariffs and Trade (GATT) and World Trade Organization have attempted to promote free trade while creating a globally regulated trade structure. These trade agreements have often resulted in d iscontent and protest with claims of unfair trade that is not beneficial to developing countries. Free trade is usually most strongly supported by the most economical ly powerful nations, though they often engage in selective protectionism for those industries which are strategically important such as the protective tariffs applied to agriculture by the United States and Europe. The Netherlands and the United Kingdom were both strong advocates of free trade when they were economically dominant, today the United States, the United Kingdom, Australia and Japan are its greatest proponents. However, many other countries (such as India, China and Russia) are increasingly becoming advocates of free trade as they become more economically powerful themselves. As tarif f levels fall there is also an increasing willingness to negotiate non tariff measures, including foreign direct investment, procurement and trade facilitation. The latter looks at the transaction cost associated with meeting trade and customs procedures. Traditionally agricultural interests are usually in favour of free trade while manufacturing sectors often support protectionism.This has changed somewhat in recent years, however. In fact, agricultural lobbies, particularly in the United States, Europe and Japan, are chiefly res ponsible for particular rules in the

major international trade treaties which allow for more protectionist measures in agriculture than for most other goods and services. During recessions there is often strong domestic pressure to increase tariffs to protect domestic industries. This occurred around the world during the Great Depression. Many economists have attempted to portray tariffs as the underlining reason behind the collapse in world trade that many believe seriously deepened the depression. The regulation of international trade is done through the World Trade Organization at the global level, and throu gh several other regional arrangements such as MERCOSUR in South America, the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, and the European Union between 27 independent states. The 2005 Buenos Aires talks on the planned establishment of the Free Trade Area of the Americas (FTAA) failed largely because of opposition from the populations of Latin American nations. Similar agreements such as the Multilateral Agreement on Investment (MAI) have also failed in recent years.