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Govt. Can Impose Nontariff Barrier

Welcome to class of Emerging Markets-Government Relations Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg Canada s.singh@uwinnipeg.ca https://abem.uwinnipeg.ca https://www.abem.ca/conference. Govt. Can Impose Nontariff Barrier.

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Govt. Can Impose Nontariff Barrier

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  1. Welcome to class ofEmerging Markets-Government RelationsDr. Satyendra SinghProfessor, Marketing and International BusinessUniversity of WinnipegCanadas.singh@uwinnipeg.cahttps://abem.uwinnipeg.cahttps://www.abem.ca/conference

  2. Govt. Can Impose Nontariff Barrier • WTO identifies 600 such barriers • Quota • Antidumping accusations • Countervailing duty by law • Labeling restrictions • Licensing mandatory • Product standards  health and safety • Custom inspection procedure  host’ll do it • Government procurement regulations • TRIM  Trade Related Investment Measure • WTO: DSB Dispute Settlement Board

  3. So Form Govt. Relations • Governments take actions • Regulate • Taxation • Expenditure • Privatize • Consultation • It impacts MNCs • Govt. actions  threats and opportunities for MNCs

  4. Government Actions:Threats and Opportunities • Given threats, MNCs need to formulate political strategy in both host and home countries  relations

  5. Political Strategy – Elements • Formulation • Objectives (form IJV, buy govt. assets, get permit, influence MPs to have favorable legislations) • Issues (current or emerging) • Stakeholders (allies, opponents, targets) • Position/Case (“public interest”) • Implementation • Timing • Techniques • Direct (negotiate, litigate) • Indirect (advocacy advertising, political contributions) • Vehicles (association coalition, Government Relations department, consultants) • Style (confrontation or conciliation depends on objective)

  6. Objectives: MNCs, SoE, Govt

  7. MNCs Strategic approach to Govt. Policy MNC Can NOT influence Govt MNC Can influence Govt To achieve Benefits of integration MNC’s objectives in Business – Govt. Interactions To achieve Benefits of National Responsiveness Strategy: Choose one (say 4); determine who has the bargaining power: Govt or MNC

  8. Bargaining Power • Governments may discriminate • Due to differing characteristics of subsidiaries • Force MNCs to have IJV, impose taxes, fix prices • Or they can give MNCs 100% foreign ownership and financial support! • Sources of Bargaining power for host country • Growing capability to replace the MNC’s products • Control access to raw materials, labor and capital • Sources of Bargaining power for MNC • Global structure, Vertical integration • MNCs avoid dealing with govtsunstable • Globalization has made govt. FDI friendly

  9. Govts Create Business Linkages

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