International Business Austria's Foreign Trade, Export, Marketing Documentation and Payment

International Business Austria‘s Foreign Trade, Export Marketing, Documentation, Payment 1. International Business: Definition  The study of transactions taking place across national borders to satisfy the needs of individuals and organisation M.R. 2 Economic transaction  Trade: exporting and importing, direct investments  Exports: goods and services produced by a firm in one country and then sent to another country  Imports: goods and services produced in one country and brought in by another country  Foreign investments: two-way – the US are investing in the EU and the other way round M.R. 3 Trade  Visible trade: raw materials and goods (commodities)  Invisible trade: services (banking, tourism) M.R. 4 Balance of trade – balance of payment  Balance of trade: shows whether a country has a surplus or deficit in its difference between total earnings from visible exports and total expenditure on visible imports -part of the balance of payment  Balance of payment: shows whether a country has a surplus or deficit in its difference between total earnings from all exports and total expenditure on all imports M.R. 5 Barter - countertrade  Countries without currency reserves can attempt to do international trade by way of barter or counter-trade.  The exchange of goods/services without the use of money.  Barter is characteristic for less developed societies, but it can also be found in modern societies. M.R. 6 International trade helps  to balance natural overproduction and deficits (oil)  to balance technical know-how  to reach the economic lot-size  to improve international division of labour  to specialise in those goods a country can produce most efficiently M.R. 7 Problems to consider  due to one-sided production, countries are sensitive to market fluctuations  dependance on foreign suppliers means self-catering is necessary M.R. 8 2. Austria‘s Foreign Trade  high dependance on its trade with Germany  other main trading partners: EU countries and Eastern European countries  Austrian exports concentrate on industrial goods (finished and semi-finished products), agricultural products and textiles  The most important goods imported are machines and vehicles. M.R. 9 Single European Market Free movement of  people  goods  services  capital M.R. 10 Polices to achieve the Four Freedoms  the removal of technical barriers (common standards)  the removal of administrative barriers (work permit, non-recognition of qualification, customs)  the removal of fiscal barriers – such as differing rates of VAT  the liberalisation of competition – restrictive practices against imports from other member states, public sector contracts given only to domestic firms – issuing of new rules on competition, public procurement contracts have to be opened up to compulsory competitive tendering procedures. M.R. 11 Effects of the Single Market  improved efficiency (differences in technical standards have been reduced)  reduced costs (reducing the red tape for exporters)  improved innovation – maintain the EU‘s place in the world economy M.R. 12 Potential draw backs  businesses which fail to find cheaper suppliers will be forced to go out of business  job losses may be caused by businesses seeking to improve their competitiveness by reducing costs. M.R. 13 WTO - GATT  multilateral organisation aiming to minimise the favouring of domestic industries  forum which was created to settle international trade dispute  successor of GATT- Today GATT is one of the four major WTO agreements which provide the legal groundrules for international commerce  the trend towards increasing interdependency among nations will continue  tendencies to regional blocs (EU, NAFTA, Pacific-Asian bloc. M.R. 14