Page 245 - Foundations of Marketing

212 Part 3 | Customer Behavior and E-Marketing

The World Trade Organization (WTO)

The World Trade Organization (WTO) is a global trade association that promotes free trade
among 157 member nations. The WTO is the successor to the General Agreement on Tariffs
and Trade (GATT) , which was originally signed by 23 nations in 1947 to provide a forum
for tariff negotiations and a place where international trade problems could be discussed and
resolved. Rounds of GATT negotiations reduced trade barriers for most products and estab-
lished rules to guide international commerce, such as rules to prevent dumping , the selling of
World Trade Organization products at unfairly low prices.
(WTO) An entity that promotes The WTO came into being in 1995 as a result of the Uruguay Round (1988–1994) of
free trade among member GATT negotiations. Broadly, WTO is the main worldwide organization that deals with the
nations by eliminating trade rules of trade between nations; its main function is to ensure that trade flows as smoothly,
barriers and educating individu-
als, companies, and govern- predictably, and freely as possible between nations. In 2012, 157 nations were members of
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ments about trade rules around the WTO.
the world Fulfilling the purpose of the WTO requires eliminating trade barriers; educating individu-
als, companies, and governments about trade rules around the world; and assuring global
General Agreement on Tariffs
and Trade (GATT) An agree- markets that no sudden changes of policy will occur. At the heart of the WTO are agree-
ment among nations to reduce ments that provide legal ground rules for international commerce and trade policy. Based
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worldwide tariffs and increase in Geneva, Switzerland, the WTO also serves as a forum for dispute resolution. For exam-
international trade ple, Mexico, the United States, and the EU complained to the WTO that China was unfairly
dumping Selling products at placing restrictions on the export of nine raw materials. The WTO determined that China’s
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unfairly low prices export restrictions violated international trade rules.

LO 4 . Identify methods of inter- MODES OF ENTRY INTO INTERNATIONAL
national market entry.
MARKETS

Marketers enter international markets and continue to engage in marketing activities at sev-
eral levels of international involvement. Traditionally, firms have adopted one of four differ-
ent modes of entering an international market; each successive “stage” represents different
degrees of international involvement. As Figure 8.1 shows, companies’ international involve-
ment today covers a wide spectrum, from purely domestic marketing to global marketing.

Marketing Debate

The Marketing Complexities of Copyright Law

ISSUE: Do Normal Rules Apply with Imported textbooks overseas at lower prices and reselling them
Products? back into the U.S. market—at lower costs than the pub-
lisher prices domestic textbooks. Publisher John Wiley
Selling is an important part of marketing, and in today’s & Sons sued for copyright infringement. Normally,
interconnected environment, marketers can sell to when individuals purchase books, they assume owner-
buyers from across the world. However, this makes the ship and can resell them without violating the copy-
use of copyrights more complex. For example, to break right. It was initially ruled by a district court jury that
into foreign markets, publishers often export textbooks this does not apply to imports of a copyrighted work.
overseas at lower prices than in the United States. However, the Supreme Court reversed the decision and
This has given individuals, such as one University of d
Southern California student, the idea of purchasing found in favor of the student.

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