Convenience

tariff
A tax collected on
goods shipped
across national
boundaries
quota
A limit on the
number or value of
goods that can be
traded
export restraint
agreements
Accords reached by
governments in which
countries voluntarily
limit the volume or
value of goods they
export to or import
from one another
54
Part 1:
An Introduction to Management
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United States, even though the price of foreign uniforms would be only half as much.
Mexico requires that 50 percent of the parts of cars sold in Mexico be manufactured
inside its own borders.
Economic Communities
Just as government policies can either increase or decrease
the political risk that international managers face, trade relations between countries can
either help or hinder international business. Relations dictated by quotas, tariffs, and so
forth can hurt international trade. There is currently a strong movement around the
world to reduce many of these barriers. This movement takes its most obvious form in
international economic communities.
An international
economic community
is a set of countries that agree to markedly
reduce or eliminate trade barriers among member nations. The first (and in many ways
still the most important) of these economic communities is the European Union. The