DEFINITION AND CHARACTERISTICS OF COMMERCIAL BUSINESS

1.1 Definition

 “Commercial business is an economic activity that invest all resources into distribution and
circulation to gain profit” (Hoang Duc Than, 2018)
 “Retailing is the set of business activities that adds value to the product and services sold to
consumers for their personal or family use” (Levy and Weits, 2012)
- Distribution trade is understood as a process that combine of actions carried out by a certain
entity and resulting in a specifiic type of products.

1.2 Nescessary and sufficient conditions to establish and develop commercial business

 The division of social labour and the diffferent ownership of means of production found
commodity economy. The division of labor improves both the skill of the worker and the
productive power of society, and thus its “function” would simply be to produce and secure
those economy, artistic (Adler, 1990)
 4 stages of commodity economy:
Production => Distribution => Exchange (circulation)=> Consumption

2.4 Goals of commercial business

Market share( the propotion

1. Introduction
 Three level of economic integration
- Global: trade liberalization by GATT (WTO,…)
- Regional: preferential treatment of member countries in the group (ASEAN,…)
- Bilateral: preferential treatment between 2 countries
 Global economic integration – efforts to reduce trade and investment barriers around the globe
- Benefits: global economic integration raises incomes generate jobs, and stimulates economic
growth
- Challenges: Environment impact, unequal distribution of the fruits from trade and investment
among the countries in the world
- Barriers to trade: tariff, subsidies, quota,…
- Barriers to investment:
 Regional economic integration: agreements between countries in a geographic region to reduce
od eliminate tariff and non tariff barriers to the free flow of goods, services, and factors of
production between each other.
 A bilateral trade agreement confers favored trading status between two nations
 The U.S has bilateral trade agrrement in force with 12 othe countries: Colombia,
 Vietnam’s bilateral Trade Agreement: CVFTA, VKFTA, UKVFTA, VJEPA,…
 Types/level of regional economic integration:
+ Free Trade Agreement: removal of intragroup tariffs
+ Customer Union: Common external tariff
+ Common Market:
+ Economic Union:
+ Political Union:
  Free Trade Areas (FTA)
- Removes all barriers or eliminate barriers to trade among member
- BUT each nation retain its own barriers to trade with non members

Eg: Vietnam joins ASEAN/AFTA

Under ASEAN/AFTA: tariff imposed on X must be 5% with the members

- If company A in VN imports X from TL

 Thailand’s government will impose 5% tariff on X imposed from VN
- If company A in VN imports X from TL
 Thailand’s government will impose 7% tariff on X imposed from VN

Do you think Thailand

 Rule of origin (ROO)

- Not all products traded in an FTA are accorded the tariff preference
- An FTA extends preference tariff ONLY to products originating from country/area.
- A good is considered to be originating if it meets the origin critieria (on) stipulated in the Rules
of Origin (ROO) chapter of an FTA.
- ROO apply mostly to FTAs like AFTA, ACFTA,CPTPP.
- ROO will determine which products are considered originating
- ROOs help to determine the “nationality” of a good
- ROOs vary from FTAs to FTAs
- AFTA/ACFTA: not less than 40% of its content originates from any Party/member.

AFTA: VN and Malaysia

Company A in VN export X to Malay

10% Malay + 20% Indo + 10% Vn = 40%