Chapter 09 – Economic Development and the Americas
5. What is marketing’s role in economic development? Discuss marketing’s contributions to
economic development.
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Chapter 09 – Economic Development and the Americas
6. Discuss the economic and trade importance of the big emerging markets.
7. One of the ramifications of emerging markets is the creation of a middle class. Discuss.
8. The needs and wants of a market and the ability to satisfy them are the result of the triune
interaction of the economy, culture, and marketing efforts of business.
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Chapter 09 – Economic Development and the Americas
20. Discuss the strategic implications of marketing in Mexico.
See the numbers for Mexico in Exhibits 9.2, 9.3, and 9.5. It is the largest Spanish speaking nation in
the world with a fast-growing and young population of over 100 million. While Brazil has avoided
Although you would think that Mexicans reserve the most conflicted attitudes towards Spain because
of their invasion and the corresponding enslavement of the populace, they actually don’t. Rather, that
position is held by the U.S. That is, they often view Norte Americanos from the U.S. (Mexico is
also part of the Americas), as cold, materialistic and overbearing. But, they also admire the “gringo
democracy, prosperity and technological achievements.”iii
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Chapter 09 – Economic Development and the Americas
21. Discuss the consequences to the United States of not being a part of the SAFTA.
Not to be an active participant in the FTAA and not to be able to influence the final architecture of the
FTAA could be a blow to the U.S. economy and trade. As a market for U.S. goods, the Western
22. Discuss the strategic marketing implications of NAFTA.
NAFTA affects a variety of strategic issues, the most important of which are:
Nontariff Barriers. In addition to elimination of tariffs, Mexico will eliminate nontariff barriers and
Rules of Origin. NAFTA reduces tariffs only for goods made in North America. Tough rules of origin
1 This section is from William Hernandez Requejo and John L. Graham, Global Negotiation: The New Rules,
Palgrave-Macmillan: New York, 2008.
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Chapter 09 – Economic Development and the Americas
Customs Administration. Under NAFTA, Canada, Mexico, and the U.S. have agreed to implement
Investment. NAFTA will eliminate investment conditions that restrict the trade of goods and service
Services. NAFTA establishes the first comprehensive set of principles governing services trade. U.S.
Intellectual Property. NAFTA will provide the highest standards of protection of intellectual
Government Procurement. NAFTA guarantees businesses fair and open competition for
Standards. NAFTA prohibits the use of standards and technical regulations used as obstacles to
23. Visit the Website for NAFTA and locate each group’s rules of origin. Which group has the
most liberal rules of origin? Why the difference?
The NAFTA sets out four “origin criteria,” meaning that there are four ways in which goods generally
meet the NAFTA rule of origin, and therefore qualify for NAFTA tariff preference.
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authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
forwarded, distributed, or posted on a website, in whole or part.
Chapter 09 – Economic Development and the Americas
24. NAFTA has been in existence for several years, how has it done? Read the section in the text “North
American Free-Trade Area (NAFTA)” that discusses the initial provisions of the agreement, and,
using the Internet, evaluate how well the provisions have been met.
One of the major criticisms was that NAFTA would result in many manufacturing companies moving
to Mexico thereby reducing the number of US manufacturing jobs. While some companies did move
to Mexico, US manufacturing output is higher than at any other time in the nation’s history and data
Even though manufacturing jobs have gone up since NAFTA, a nagging question about jobs that have
been lost specifically because of NAFTA. The answer depends on whom you ask. One economist
A Commerce Department rule of thumb is that for every $1 billion of US exports 14,000 jobs are
4 Fast-track authority allows the President to negotiate trade agreements with the assurance that Congress will vote to either accept or reject the
agreement without amendments or changes. Without fast track, countries are reluctant to negotiate seriously since the President cannot assure that
agreements will survive Congressional approval intact.
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Chapter 09 – Economic Development and the Americas
Mexico’s apparel exports to the U.S. have tripled to $3.3 billion since NAFTA began. Last year
Mexico surpassed Hong Kong and China to become the U. S.’ top source of imported apparel. This is
The investment boom in Mexico has been a major source of new demand for U.S. manufacturers of
capital goods. The largest post-NAFTA gains in U.S. exports to Mexico have been in such high
technology manufacturing sectors as industrial machinery, transportation and electronic equipment,
For Valley Drive Systems, manufacturer of automobile front-wheel-drive assemblies, NAFTA has
been a success. Because Canadian tariffs on its products were lowered, Valley Drive products are now
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authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated,
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i The Official Name of Mexico is “Estados Unidos Mexicanos”
ii Gringo (feminine, gringa) is a term in the Spanish and Portuguese languages used to refer to foreigners,
especially those from the United States. Although its original meaning was perhaps derogatory, its usage today is
not necessarily pejorative, even though it may be considered offensive by English-speakers. The American
Heritage Dictionary does however classify the term as offensive slang. In informal Spanish speech, “gringo”
offers a convenient shorthand to refer to a person from the U.S., since the term “American” is used to refer to
anyone from the entire American continent (North, Central and South), while the more specific term
“estadounidense” (“one from the United States”) is somewhat cumbersome to pronounce. www.wikipedia.com
iii Randy Malat, Passport Mexico, World Trade Press, San Rafael, California, 1996 pg. 19
iv Malat, pg. 34