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III. Answer the following questions.
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1.How can you prove that the world has seen an international trade boom in recent years? 2. How is it possible to understand the working of the world economy? 3. What are the two sides of every trade relationship? 4. What is the basic idea of international trade? 5. What is the main difference between domestic trade and international trade? 6. Why is trade and investment a two-way street? 7. What opportunity are consumers given in an interlinked global economy? 8. Will trade barriers always exist? 9. What are the results of erecting artificial trade barriers? 10. What is the balance of trade? 11. What is the balance of payment? 12. What is the consequence of the difference between the values of exports and imports?
VI. Translate the following sentences into English.
1. Они продают свою продукцию внутри страны, но на экспорт пока не вышли. 2. Британии надо уменьшить импорт, чтобы поддержать отечественное производство. 3. Импортеры и экспортеры иногда используют одну и ту же валюту. 4. Не платите импортеру в его собственной валюте. 5. Иногда правительство запрещает импорт определенных товаров по санитарным соображениям. 6. Рынок был не в лучшем состоянии, но снижение цен было незначительным.
V. Read and translate the following texts.
International business operations
International business operations, by their very nature, are complex, risky and require special understanding. Foreign business operations are more complex because the host country's economy may be different from the domestic economy.
One of the most common forms of international business is to import and export merchandise. Importing is particularly prevalent in the retailing industry. Big companies have legions of buyers who scour the world, looking for merchandise to import. Smaller companies also handle imported goods, although they may purchase them through wholesalers in their country rather than directly abroad.
The low-risk approach to international marketing is exporting. Manufacturers often enter foreign markets by exporting. This enables them to test a market with small shipments before investing in expended production capabilities or foreign manufacturing facilities.
Two basic approaches can be taken to exporting. Indirect exporting is handled by intermediaries such as buying and exporting agents who buy the products directly from their own name. Indirect exporters typically have no contact with customers in their foreign markets.
Direct exporting is handled directly by manufacturers and requires a great commitment of both managerial and financial resources. One of the least risky ways to export indirectly is through an export trading company, which buys everything from manufactured goods to raw materials and then resells these products in foreign markets. The manufacturer receives a guaranteed price, and the trading company assumes all the risk.
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Companies that want to export their products may do so directly by calling on potential customers overseas, or they may rely on intermediaries in their country or abroad. Working through someone with connections in the target country is particularly attractive to smaller companies and to those with little experience in international business. But many countries now have foreign trade offices that help importers and exporters interested in doing business within their borders.
Vocabulary
domestic economy – внутренняя экономика
prevalent – распространенный, общепринятый, общеупотребительный
legion – масса, множество
production capabilities – производственные возможности; производственный потенциал
manufacturing facilities – производственное оборудование; производственные помещения
approach – подход
intermediary – посредник
to assume risk – принимать на себя риск
Import-export transactions
An import-export transaction usually requires a lot of complicated documentation. Many different arrangements have to be made and this can be difficult when one firm is dealing with another on the other side of the world.
Many specialists may be involved in import-export transactions.
1. A shipping agent or foreign forwarder (forwarding agent) will take responsibility for the documentation and arrange for the goods to be shipped by air, sea, rail and road.
2. Airlines, shipping lines, railway companies will actually transport the goods.
3. Both the importer and exporter's banks will be involved in arranging payments if a letter of credit or a bill of exchange is used.
4. Customs and Excise officers may need to examine the goods, check import or export licenses and charge duty, and VAT.
5. A Chamber of Commerce may need to issue a Certificate of Origin, if this is required by the importer's country.
6. An insurance company to insure goods in transit.
7. A lawyer if a special contract has to be drawn up.
A lot of different documents may be needed, including Bill of Lading, Sea (Air) Waybill, Shipping Note, Dangerous Goods Note and others. Some of these documents can be replaced by computerized procedures or photocopies.
Many import and export deals are arranged through an exporter's agent or distributor abroad – in this case the importer buys from a company in his own country and the company imports the goods. Alternatively, the deal may be arranged through an importer's buying agents. In this case the exporter sells directly to a company in his own country, who will then export the goods.
Prices for the exports may be quoted in the buyer's currency, the seller's currency or in a third «hard» currency. The price quoted always indicates the terms of delivery which depend on the kinds of goods being traded and the countries between which the trade is taking place. While choosing methods of payment exporters and importers prefer security of payment when dealing with unknown firms in distant countries.
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Vocabulary
shipping agent – экспедитор, агент по погрузке и отправке грузов
forwarder – перевозчик, экспедитор
to take responsibility for smth. – взять на себя ответственность за что-либо
to ship – перевозить (грузы и т. п.)
letter of credit – аккредитив
bill of exchange – вексель, тратта
excise officer – акцизный чиновник
VAT Value Added Tax – налог на добавленную или приращенную стоимость
Chamber of Commerce – торговая палата
Certificate of Origin – сертификат о происхождении товара, сертификат "происхождения"
insurance company – страховая компания
lawyer – юрист; адвокат
to draw up a contract – составить договор
bill of lading – накладная, коносамент
waybill – транспортная накладная, путевой лист
shipping note – ордер на погрузку, погрузочный ордер
to quote a price – назначать цену
currency – валюта
UNIT 20
Foreign trade
What is now called international trade has existed for thousands of years long before there were nations with specific boundaries. Foreign trade means the exchange of goods and services between nations, but speaking in strictly economic terms, international trade today is not between nations. It is between producers and consumers or between producers in different parts of the globe. Nations don’t trade, only economic units such as agricultural, industrial, and service enterprises can participate in trade.
Goods can be defined as finished products, as intermediate goods used in producing other goods, or as agricultural products and foodstuffs. International trade enables a nation to specialize in those goods it can produce most cheaply and efficiently and it is one of the greatest advantages of trade. On the other hand, trade also enables a country to consume more than it can produce if it depends only on its own resources. Finally, trade expands the potential market for the goods of a particular economy. Trade has always been the major force behind the economic relations among nations.
Different aspects of international trade and its role in the domestic economy are known to have been developed by many famous economists. International trade began to assume its present form with the establishment of nation-states in the 17th and 18th centuries, new theories of economics, in particular of international trade, having appeared during this period.
In 1776 the Scottish economist Adam Smith, in The Wealth of Nations, proposed that specialization in production leads to increased output and in order to meet a constantly growing demand for goods it is necessary that a country's scarce resources be allocated efficiently. According to Smith's theory, it is essential that a country trading internationally should specialize in those goods in which it has an absolute advantage – that is, the ones it can produce more cheaply and efficiently than its trading partners can. Exporting a portion of those goods, the country can in turn import those that its trading partners produce more cheaply. To prove his theory Adam Smith used the example of Portuguese wine in contrast to English woolens.
Half a century later, having been modified by the English economist David Ricardo, the theory of international trade is still accepted by most modern economists. In line with the principle of comparative advantage, it is important that a country should gain from trading certain goods even though its trading partners can produce those goods more cheaply. The comparative advantage is supposed to be realized if each trading partner has a product that will bring a better price in another country than it will at home. If each country specializes in producing the goods in which it has a comparative advantage, more goods are produced, and the wealth of both the buying and the selling nations increases.
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Trade based on comparative advantage still exists: France and Italy are known for their wines, and Switzerland maintains a reputation for fine watches. Alongside this kind of trade, an exchange based on a competitive advantage began late in the 19th century. Several countries in Europe and North America having reached a fairly advanced stage of industrialization, competitive advantage began to play a more important role in trade. With relatively similar economies countries could start competing for customers in each other's home markets. Whereas comparative advantage is based on location, competitive advantage must be earned by product quality and customer acceptance. For example, German manufacturers sell cars in the United States, and American automakers sell cars in Germany, both countries as well as Japanese automakers competing for customers throughout Europe and in Latin America.
Thus, international trade leads to more efficient and increased world production, allows countries to consume a larger and more diverse amount of goods, expands the number of potential markets in which a country can sell its goods. The increased international demand for goods results in greater production and more extensive use of raw materials and labour, which means the growth of domestic employment. Competition from international trade can also force domestic firms to become more efficient through modernization and innovation.
It is obvious that within each economy the importance of foreign trade varies. Some nations export only to expand their domestic market or to aid economically depressed sectors within the domestic economy. Other nations depend on trade for a large part of their national income and it is often important for them to develop import of manufactured goods in order to supply the ones for domestic consumption. In recent years foreign trade has also been considered as a means to promote growth within a nation's economy. Developing countries and international organizations have increasingly emphasized such trade.
Vocabulary
international trade – международная торговля
boundary – граница
foreign trade – внешняя торговля
economic unit – хозяйственная единица
agricultural enterprise – сельскохозяйственное предприятие
industrial enterprise – промышленное предприятие
service enterprise – предприятие сферы обслуживания
finished goods – готовые изделия
intermediate goods – полуфабрикаты
agricultural goods – сельскохозяйственные товары
foodstuffs – пищевые продукты
to expand – расширять, развивать
domestic economy – внутренняя экономика
to assume – зд. принимать
to meet demand – удовлетворять спрос, требования
scarce resources – редкие ресурсы
to allocate – размещать, распределять
absolute advantage – абсолютное преимущество
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in turn – в свою очередь
woolens – шерстяные ткани
comparative advantage – сравнительное преимущество
in line with – в соответствии с
to gain – выигрывать; получать; извлекать пользу, выгоду
competitive advantage – преимущество, основанное на конкуренции
product quality – качество продукции
customer acceptance – приемка изделий заказчиком
extensive use – широкое применение, использование
employment – занятие; работа; занятость
innovation – нововведение, новшество; инновация, новаторство
domestic market – внутренний рынок
to aid – помогать, оказывать помощь, поддержку, способствовать
depressed sector – ослабленный сектор
developing countries – развивающиеся страны
I. Give Russian equivalents to the following word combinations:
international trade; exchange of goods and services between nations; economic unit; to participate in trade; agricultural enterprise; intermediate goods; foodstuffs; to consume; to expand the potential market; economic relations among nations; domestic economy; to meet a growing demand for goods; growth of domestic employment; to expand a domestic market; to develop import of manufactured goods.
II. Give English equivalents to the following word combinations:
внешняя торговля; промышленное предприятие; предприятие сферы обслуживания; готовые изделия; сельскохозяйственные товары; удовлетворять спрос; распределять редкие ресурсы; абсолютное преимущество; сравнительное преимущество; преимущество, основанное на конкуренции; качество продукции; приемка изделий заказчиком; широкое использование сырья; помогать ослабленным секторам местной экономики; внутреннее потребление; развивающиеся страны.
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