1.6 Opportunities created by international competition:

• Larger markets for U.S. products due to globalization

• Increased efficiency (including via mergers and restructuring)

encouraged to compete effectively

• Access to international financial markets

• Opportunities to learn from foreign firms (e.g., GM-Toyota joint venture)

Threats created by international competition:

• Added uncertainty of fluctuating currency exchange rates

• Competition from lower-cost producers in developing countries

• Increased world capacity and conditions of supply that may create downward pressures on prices and profit margins

• New foreign industry started from scratch, avoids mistakes or need for modernizing plan and equipment (Japanese car plants more efficient than old U.S. plants)