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1 |
Environment of Global Finance |
AGENDA
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1.1 |
Lead-in |
Prereading |
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1.2 |
Language input |
Developing vocabulary |
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1.3 |
Background information |
Environment of Global Finance |
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1.4 |
Comprehension |
Understanding the reading Scanning |
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1.5 |
Speaking & Writing |
Fill-in exercises Writing reports & compositions |
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Language focus |
Word-building: Countries and nationality adjectives |
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Presenting information |
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Skills Focus |
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1.6 |
Dialogue 1 |
Import & Export |
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Dialogue 2 |
Trade Restrictions |
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Supporting materials |
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Reading for Cross-cultural Associations |
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1.7 |
Case study & Role play 1 |
Considering a Countertrade Proposal |
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Case study & Role play 2 |
Limit Car Imports |
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1.8 |
Grammar Back Up Practice with Nouns & their Determiners |
The Infinitive Practice with Nouns & their Determiners |
1.1 LEAD-IN
Section Overview
In this section you will learn how international finance and banking have evolved, why countries trade with other countries, on what principles nations base their economic policies and why trade restrictions exist.
1.2 LANGUAGE INPUT
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accommodate v |
улаживать; подгонять; приспосаб-ливать(ся); обеспечивать, снабжать (with); предоставлять жилье |
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arrange v arrange for something arrangement n |
устраивать, организовывать, приво-дить в порядок; уславливаться, договариваться, приходить к соглашению принимать меры, давать распоряжения о чем-либо устройство, организация; расположение в определенном порядке, классификация; договоренность, соглашение |
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balance n balance of trade to maintain a(n) (un)favourable balance of trade balance of payments |
сальдо; баланс; равенство; остаток; торговый баланс (государственный) поддерживать положительное (отрицательное) сальдо торгово-го баланса платежный баланс (государственный) |
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benefit n benefit v to benefit from (by) |
прибыль, выгода; пособие, пенсия приносить пользу, выгоду,прибыль получать/извлекать пользу, выгоду, прибыль |
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bound a to be bound to do something |
обязанный, вынужденный быть должным непременно/ обязательно сделать ч-л |
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cater v cater for / cater to |
обеспечивать, обслуживать удовлетворять (требования) обслуживать, угождать |
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charge n charge v |
плата, сбор, тариф, расход, начисление, взыскание относить на дебет/счет, начислять, взыскивать |
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commitment n to meet commitments to enter into commitments |
обязательство; затраты, вложение капитала; вовлечение, втягивание выполнять обязательства взять на себя обязательства |
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credit v |
кредитовать, проводить по кредиту, заносить на кредит |
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debit v |
дебетовать, относить на счет дебета, проводить по дебету |
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draw v draw on the reserves withdrawal |
брать, снимать (деньги со счета) заимствовать из/использовать, сокращать резервы снятие (со счета), расход |
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eliminate v eliminations |
устранять, исключать исключение внутрифирменных расчетов |
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entry n to calculate entries in the balance sheet |
(бухгалтерская) запись, проводка подсчитать проводки в балансовом отчете |
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estimate n estimate v |
оценка; исчисление; подсчет; смета; калькуляция исчислять, подсчитывать, состав-лять смету, определять на глаз |
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forwarder n freight forwarder |
перевозчик, экспедитор экспедиционное агентство, организующее перевозки партий грузов |
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fee n fees and royalties |
вознаграждение; гонорар; взнос; сбор; комиссия, комиссионный сбор, плата за услуги доходы от продажи патентов, лицензий и технического опыта |
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grant n grant v |
субсидия, дотация, безвозвратная ссуда, дар предоставлять субсидию, дотацию |
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holding holdings |
владение, запас, пакет акций вклады, авуары |
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impose v to impose tariffs / quotas |
налагать, облагать, вводить облагать пошлиной / вводить квоты |
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inflow/outflow of money |
приток/отток денег |
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insure v insurance n |
cтраховать(ся), застраховать(ся) страхование; страховой платеж; страховой полис |
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levy v |
взимать / облагать (налогом) |
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maintain v |
сохранять, поддерживать |
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panel n fact-finding panel government panel impartial panel |
группа экспертов (для обсуждения общественно важного вопроса); участники дискуссии, викторины и т. п. (в телепередаче) комиссия по расследованию правительственная комиссия группа независимых экспертов |
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provide v provide for (something) provide with (something) |
предоставлять, давать обеспечивать (средствами к существованию) / содержать предусматривать, обусловливать; снабжать, обеспечивать |
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raise v (money) |
cобирать / занимать / добывать / получать деньги |
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reimburse v |
возвращать, возмещать, компенси-ровать, покрывать, оплачивать |
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remittance n
immigrant remittances |
перевод (денег), ремитирование, пересылка; денежный перевод денежные переводы иммигрантов на родину (статья в платежном балансе) |
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require v requirement |
требовать, приказывать, нуждаться требование, потребность |
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restrict v restriction n restrictions restrict something. by something syn to impose constraints |
ограничивать ограничение ограничительные меры ограничивать что-либо посредством чего-либо син вводить ограничения |
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restrictive a |
ограничительный, ограниченный, запрещающий |
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revenue n revenue duty revenues tax revenue |
доход, государственные доходы фискальная пошлина доходные статьи доход от налогов |
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salary n |
жалованье, оклад |
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self-sufficient a |
самостоятельный, самообеспеченный |
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shipping agent |
экспедитор, агент по погрузке и отправке грузов |
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stock n stocks n, pl Syn: share |
основной капитал; фонды; доля акций, акции; пакет акций; фонды (часть суммарного акционерного капитала, принадлежащая определенному лицу или группе лиц) |
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surplus n |
излишек, избыток, превышение, остаток; активное сальдо (торгового или платежного баланса) |
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tariff n protective tariff revenue tariff |
тариф (налог, которым облагаются ввозимые в страну товары на осно-ве их стоимости или количества, инструмент государственной эко-номической политики для защиты внутреннего рынка); расценка; пошлина; шкала ставок/сборов протекционистский тариф фискальный тариф |
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tariff v |
производить расценку; облагать пошлиной |
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tax n |
налог, сбор, пошлина |
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tax v |
облагать налогом или пошлиной, взимать /назначать |
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trade n visible (invisible) trade to trade item for item to trade the surplus |
торговля, отрасль торговли торговля товарами (услугами) менять товар на товар торговать излишками |
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yield v a profit/a loss |
приносить доход / убыток |
1.2.1 Consult a dictionary and practise the pronunciation of the follo-wing words and word combinations, quote the sentences in which they are used in the text or submit the examples of your own:
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an irrevocable letter of credit associates chamber of commerce cooperation in politics cooperative crucial impact deposits in foreign currencies distributor emphasis freight forwarder haulage firms immigrant remittances in monetary terms real recital of facts and surmise the export of chemicals the import of merchandise the subsequent profits the surplus of petroleum to accomplish to be operative to be reimbursed to be vulnerable to dangers to determine an excess to export the manufactured goods to have the expertise to impose quotas to process raw materials to produce automobiles to purchase insurance for the cargo’s voyage to record a debit to reverse to set up a trading subsidiary to transfer title to a middleman to yield a profit variables variety of sources |
Benelux Brazil / Brazilian Carlisle Cleveland Colombia France Germany Greece Guatemala Hong Kong Japan Lagos Nigeria / Nigerian Norway Ohio Peru Scandinavia Sweden Switzerland Zaire Zurich |
1.2.2 Match the English word combinations in the left-hand column with the Russian equivalents in the right-hand column:
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1. |
to accommodate a deficit in the balance of payments |
A |
оплата безотзывным аккредитивом |
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2. |
to be insufficient to cover further withdrawals |
B |
перерабатывать сырье в промышленные товары |
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3. |
to assure somebody of the means to do something |
C |
вводить ограничения, оказывать давление |
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4. |
payment by bill of exchange |
D |
ставки налога на добавленную стоимость |
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5. |
payment on open account |
E |
подвергаться опасностям |
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6. |
to be prohibited from something / doing something |
F |
получать вознаграждение за страхо-вание внешней торговли других стран |
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7. |
to process raw materials into manufactured goods |
G |
быть уравновешенным проводкой (сальдировать) |
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8. |
payment by irrevocable letter of credit |
H |
быть недостаточным для покрытия дальнейших расходов |
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9. |
to be vulnerable to dangers |
I |
договориться о перевозке |
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10. |
to diminish the cargo’s value |
J |
добиться чего-либо посредством введения пошлин |
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11. |
VAT(value added tax) rates |
K |
потерять/уничтожить преимущества |
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12. |
to possess little in the way of exportable commodities |
L |
уверить кого-либо в наличии средств для совершения чего-либо |
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13. |
to accomplish something by imposing tariffs |
M |
уменьшить объем / количество/ стоимость товара |
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14. |
to pay the commissions and salaries |
N |
устранить дефицит платежного баланса |
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15. |
payment on a cash with order basis |
O |
иметь мало товаров, пригодных для экспорта |
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16. |
to earn fees for insuring other nations’ foreign trade |
P |
выплачивать комиссионные вознаграждения и жалованье |
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17. |
to impose constraints |
Q |
оплата по открытому счету |
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18. |
to be balanced by an entry |
R |
установить дефицит или профицит |
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19. |
to determine a deficit or surplus (excess) |
S |
иметь запрещение на что-либо или какое-либо действие |
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20. |
to eliminate advantages |
T |
оплата переводным векселем |
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21. |
to arrange for transportation |
U |
наличный расчет при выдаче заказа |
Environment of Global Finance
There are clear benefits to being open to international trade: trade allows people to produce what they produce best and to consume the great variety of goods and services produced around the world. The key macroeconomic variables that describe an interaction in world markets are exports, imports, the trade balance, and exchange rates. Economies buy and sell goods and services in world product markets, and buy and sell capital assets in world financial markets.
When nations export more than they import, they are said to have a favourable balance of trade. When they import more than they export, an unfavourable balance of trade exists. Nations try to maintain a favourable balance of trade, which assures them of the means to buy necessary imports. Some nations, such as Great Britain in the nineteenth century, based their entire economy on the concept of importing raw materials, processing them into manufactured goods, and then exporting the finished goods.
In addition to visible trade, which involves the import and export of goods and merchandise, there is also invisible trade, which involves the exchange of services between nations. Brazilian coffee is usually transported by ocean vessels because these ships are the cheapest method of transportation. Nations such as Greece and Norway have large maritime fleets, which can provide this transportation service.
The prudent exporter purchases insurance for his cargoes’ voyage. While at sea, a cargo is vulnerable to many dangers, the most obvious being that the ship may sink. In this event, the exporter who has purchased insurance is reimbursed. Otherwise, he may suffer a complete loss. Insurance is another service in which some nations specialize. Great Britain, because of the development of Lloyd’s of London, is a leading exporter of this service, earning fees for insuring other nations’ foreign trade.
Some nations possess little in the way of exportable commodities, but they have a mild and sunny climate. Tourists spend money for hotel accommodation, meals, taxis, and so on. Tourism, therefore, is another form of invisible trade.
In the past twenty years, millions of workers from the countries of southern Europe have gone to work in Germany, Switzerland, France, the Benelux nations, and Scandinavia. The commissions and salaries that are paid to these people represent another form of invisible trade. The workers send money home to support their families. These are called immigrant remittances. They are an extremely important kind of invisible trade for some countries, both as imports and exports.
The main difference between domestic trade and international trade is the use of foreign currencies to pay for the goods and services crossing international borders.
Whenever a country imports or exports goods and services, there is a resulting flow of funds: money returns to the exporting nation, and money flows out of the importing nation. Trade and investment is a two-way street, and with a minimum of trade barriers, international trade and investment usually makes everyone better off.
Investments can have a crucial impact on a nation’s balance of payments. When an investment is made, capital enters a country, enabling it to import manufactured materials to build a new manufacturing plant and to pay workers to build it. Once the plant is operative, it provides both jobs and taxes for the host country and, in time, produces new manufactured goods for export. In this way, investment acts as a catalyst in economic growth for the developing countries throughout the world.
In subsequent years, an investment should yield a profit. Dividends, sums of money paid to shareholders of a corporation out of earnings, can then be remitted to the investing country. From the perspective of the balance of payments, in the year the investment is made, the host country credits income to its balance of payments, and the investing country records a debit. This is reversed in the following years. The dividends then represent an expense for the host country and income for the investing country.
After calculating all of the entries in its balance of payments, a nation has either a net inflow or a net outflow of money.
The nation’s reserves may be compared to an individual’s savings. For a nation, they are maintained in holdings of gold and official deposits in foreign currencies. A deficit in the balance of payments can be accommodated by drawings on (removing some of) the reserves, that is the previous savings. But if a nation’s balance of payments continues in deficit for some time, then the reserves will be insufficient to cover further withdrawals, and additional measures must be taken.
The most direct means of correcting a deficit in the balance of payments and having an immediate impact is by reducing imports. This can be accomplished by imposing tariffs (taxes), quotas (import restrictions), or both. If successful, the cost of imports rises in the local market, and the imported goods are comparatively more expensive to the consumer than locally made goods. When a quota is imposed, the quantity previously imported and paid for is reduced.
In either case, the net effect is the reduction of the nation’s outflow of money. Other measures may limit invisible trade expenditures. For example, citizens may be prohibited from taking more than a specified amount of money with them when they travel abroad.
Capital for investments abroad can be restricted by requiring government approval for any new foreign investments. When the United States encountered serious balance of payments problems in the 1960s, the government restricted the loans that United States banks could extend abroad. This was a large item in its balance of payments because of the United States’ role in world finance. The government also restricted the amount that United States corporations could invest overseas.
If these measures are insufficient, a country may devalue its currency. This immediately makes imports more expensive and exports more competitive, since the importing country can now pay for the first country’s imports with less of their currency than previously. In time, these advantages are eliminated. A nation must at all times combine devaluation with other effective measures to balance its economy, resulting in a reasonable level of employment and low rate of inflation.
Gold has been the traditional reserves. At one time, gold moved freely from country to country, but successive constraints have been imposed in the past years. Today, gold counts as only one form among many in the reserves of a country. A number of countries have an agreement with the Federal Reserve Bank of New York to hold their gold in safekeeping. This makes it possible for these countries to buy gold from or to sell gold to other countries by merely moving the gold from one custodian vault to another at the Federal Reserve Bank of New York.
Free trade agreements often cause disputes between countries, especially when one country thinks the other is engaged in restrictive practices. Occasionally, trade wars erupt, and sanctions or embargoes are imposed on countries, and may not be lifted for long periods. On the other hand European countries closely related economically and enjoying good relations have entered into monetary union and have a single currency.
1.4 COMPREHENSION
Understanding the reading
1.4.2 Scan the text to determine whether these statements are true (T) or false (F). With a partner, discuss why.
e.g. In my opinion it is true that/I’m afraid it is false that ..., because ...
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1. |
If the country runs a trade deficit, net exports are negative, exports are less than imports, indicating that the country sells fewer goods and services abroad than it buys from other countries. |
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2. |
As the price in any market serves the important role of coordinating buyers and sellers in that market, international prices help coordinate the decisions of consumers and producers as they interact in world markets. |
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3. |
The prudent exporter purchases insurance for his cargo’s voyage because the exporter who has purchased insurance pays less for his cargo’s voyage. |
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4. |
If the exchange rate changes so that a dollar buys more foreign currency, that change is called a devaluation of the dollar. |
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5. |
An economy’s saving can be used either to finance investment at home or to buy assets abroad. |
1.4.3 Scan the text and find the information to complete the following lists:
A ________________________________________________________
B ________________________________________________________
C ________________________________________________________
D _______________________________________________________
E ________________________________________________________
2. Investments significantly affect a nation’s balance of payments, because capital enters a country enabling it
A ________________________________________________________
B ________________________________________________________
C ________________________________________________________
D _______________________________________________________
E ________________________________________________________
F ________________________________________________________
1.4.4 Scan the text again and find the English equivalents for the following:
1.4.5 Develop the following ideas. Make use of the active vocabulary given in brackets:
1. Many factors that might influence a country’s exports, imports, and net exports change over time, so does the amount of international trade. These factors include the following:
(within borders, to have enough of a particular item to meet the needs, to produce domestically/on an external market, to derive a comparative advantage, innovation, to base the economy on a certain concept, to earn money to buy necessities, to maintain a favourable/unfavourable balance of trade, to import/export raw materials, to process something into something, manufactured/finished goods, the subsequent profits, to involve the exchange of services, method of transportation, maritime fleet, to arrange for something, to rent space)
2. A nation’s saving and investment are crucial to its long-run economic growth.
(to be maintained in holdings of gold and official deposits in foreign currencies, to be accommodated by drawings on the reserves, to be insufficient to cover further withdrawals, means of correcting a deficit in the balance of payments, to be accomplished by imposing tariffs and quotas, the reduction of the nation’s outflow of money, to limit invisible trade expenditures, to be prohibited from something, to be restricted by requiring government approval for something, to devalue the currency, a reasonable level of employment)
1.5 PRACTICE
Language focus
Word Building
1.5.1 Consult a dictionary and practise the pronunciation of the following words and word combinations:
Countries and nationality adjectives
Adjectives ending in -an (the most common type)
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Algeria - Algerian Russia - Russian India - Indian Italy - Italian Norway - Norwegian Egypt - Egyptian Belgium - Belgian Kenya - Kenyan Malaysia - Malaysian |
America (the USA) - American Australia - Australian Indonesia - Indonesian Germany - German Korea - Korean Brazil - Brazilian Argentina - Argentinean Canada - Canadian Nigeria - Nigerian |
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Adjectives ending in - ese |
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Japan - Japanese Portugal - Portuguese Taiwan - Taiwanese |
China - Chinese Vietnam - Vietnamese |
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Adjectives ending in - ish |
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Britain (the UK) - British Poland - Polish Spain - Spanish Turkey - Turkish |
Finland - Finnish Sweden - Swedish Denmark - Danish |
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Adjectives ending in - i |
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Pakistan - Pakistani |
Saudi Arabia - Saudi / Saudi Arabian |
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Others |
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France - French Switzerland - Swiss The Philippines - Philippine |
The Netherlands - Dutch Greece - Greek Hong Kong - Hong Kong |
Skills focus
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1.5.2 |
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_________________________________
Financial decisions in Britain are heavily influenced … what happens overseas. The exchange rate of the pound, foreign interest rates, and the view that outside investors take … Britain as a profitable place to park their money all profoundly influence … decisions about saving and investment by British people. It is important, however, to distinguish … the impact on ordinary people and the impact … professional investors who manage trillions (thousands of billions) of pounds … pension funds, life insurance, and bonds on behalf … individuals. If I find the interest rate … my house mortgage has gone … because German interest rates have risen, there is little I can do, at least … the short run. I may be able to counteract the effect on my mortgage … shifting savings … accounts which offer higher interest rates and many British people have become skilled … hunting down the banks which offer the most favourable returns. In the long run, these innumerable individual decisions can and do move markets.
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1.5.3 |
a. Complete the text by using the following word combinations from the box and fill in the grid. |
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A |
stock market |
G |
industrial country |
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B |
wealthy |
H |
collective investment |
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C |
invest heavily |
I |
goods |
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D |
savings |
J |
financial centre |
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E |
Fund managers |
K |
Insurance companies, pension funds |
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F |
assets |
L |
trading nation |
…(1)… can move markets immediately. Their power has grown immensely. …(2)… and other types of …(3)… own at least 60 per cent of the …(4)…. British fund managers …(5)… overseas. About a quarter of pension fund …(6)… are abroad, a much bigger proportion than for any other major …(7)…. Partly this is historical. In the nineteenth century, when Britain was an imperial power and the richest country in the world, the increasingly …(8)… middle class invested in …(9)… everywhere from Shanghai to San Francisco. It also reflects Britain’s continued importance as a …(10)… , exporting more …(11)… per head of population than most other countries. Above all, London has survived Britain’s relative economic decline (the British have got richer, but not as fast as other countries) and remained the world’s most important international …(12)… .
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1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
1.5.4 a. Read the text, ignoring the missing parts.
…(1)… , where people buy and sell foreign currency, also referred to as the “Forex” or “FX” market, …(2)… , 30 times larger than the combined volume of all US equity markets.
Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY).
…(3)… . About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. …(4)… , or speculation.
For speculators, the best trading opportunities are with the most commonly traded (and therefore most liquid) currencies, called “the Majors”. …(5)… , which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.
Forex trading begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, London, and New York. …(6)… , and investors can respond to currency fluctuations caused by economic, social and political events at the time they occur – day or night.
…(7)… , due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network.
b. Look at the missing parts A-H and fit them in the gaps. There is one extra you don’t need.
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A |
The other 95% is trading for profit |
|
B |
is the largest financial market in the world |
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C |
It’s a 24-hour market |
|
D |
The Foreign Exchange market |
|
E |
The FX market is considered an Over The Counter (OTC) or “interbank” market |
|
F |
Today, more than 85% of all daily transactions involve trading of the Majors |
|
G |
There are two reasons to buy and sell currencies |
|
H |
Foreign money held by a government to support its own currency |
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1 |
2 |
3 |
4 |
5 |
6 |
7 |
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D |
c. Find words or word combinations in the text that mean the following.
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…………. |
market where people buy and sell foreign currencies |
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…………. |
money of another country |
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…………. |
number of times something is used or sold in a period (e.g. a day); amount of sales of goods or services by a company |
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…………. |
money gained from a sale which is more than the money spent |
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…………. |
deal which is it is hoped will produce a profit |
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…………. |
someone that has the same job or purpose but in a different country or organisation |
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…………. |
another word for stocks and shares |
|
…………. |
up and down movements of the exchange rate |
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…………. |
market in shares which are not listed on the official Stock Exchange, usually carried out by phone or using electronic means |
|
…………. |
by way of |
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…………. |
set of computers which are connected to each other and operate as part of the same system, able to exchange information and messages |
A
B
Economic activity began with a caveman, who was economically self-sufficient. He did his own hunting, found his own shelter, and made sure that he had the things that he needed. As primitive populations grew and developed, the principle of division of labour evolved. One person was more able to perform some activity than another, and therefore each person concentrated on what he did best. While one hunted, another fished. The hunter then traded his excess of production or supply to the fisherman, and thus each profited (benefited) from the variety of diet.
In today’s complex economic world, neither individuals nor nations are self-sufficient. Nations have utilized different economic resources; people have developed different skills. This is the foundation of world commerce and economic activity. As a result, international finance and banking have evolved. For example, the United States is a major purchaser of coffee, yet it does not have the climate to grow any of his own. Consequently, the United States must bring coffee into a country from countries (such as Brazil, Colombia, and Guatemala) that grow coffee efficiently. On the other hand, the United States has large industrial plants capable of producing an assortment of goods, such as chemicals and aeroplanes, which can be sold to nations that need them. If nations counter traded, such as one automobile for 10,000 bags of coffee, foreign trade would be extremely cumbersome and limited. But instead of barter, which is the trade of goods without an exchange of money, the United States receives money in payment for what it sells. It pays for Brazilian coffee with dollars, which Brazil can use to obtain in exchange for payment wool from Australia, which in turn can buy textiles from Great Britain, which can then buy tobacco from the United States.
1.5.6
A. Search for keywords invisibles, trade balance, financial centers, Lloyds Underwriters, Forex, Eurocurrency market in the Internet to find further information about one of these items. Report on your findings in a presentation using the following points and helpful phrases from the chart:
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Introduction: |
We make general remarks about the subject. |
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Main Part: |
We present our viewpoints and justify them with examples. |
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Conclusion: |
We give the gist of the presentation again briefly in a different way. |
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Greetings |
Introduction (Preparing the audience) |
Main Part (Delivering the message) |
Conclusion (Winding-up) |
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Dear listeners! |
I’m going to be talking about ... . |
Firstly ... . Secondly ... . |
So, to cut a long story short … . |
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Good morning, ladies and gentlemen! |
I’ll start with ... and then move on to ... . Finally, I’m going to … |
This brings me to my next point ... . |
In conclusion it’s important to remind you … |
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I think, if you don’t mind we’ll leave questions to the end. |
To bolster the argument3** I should say that ... . |
Let’s dot the “i”s and cross the “t”s |
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I hope my lecture won’t be a long shot4*. |
I must emphasize … |
That’s about all there is to it. |
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At this point we must consider ... . |
Thank you for listening. |
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To go back to my earlier point ... . |
Now if there are any questions, I’ll be happy to answer them. |
B. Comment on the presentation given by your colleague. Make use of the following points and helpful phrases. Do your best so as not to offend the speaker and to show the positive sides of the presentation rather than criticize it:
- The timing
-The lay-out of the presentation
- The manner of presentation
- General language ability
- The contents of the presentation
- The use of visuals and slide structure
- I assume, ... (guess, reckon... etc.) / I should admit that ...
- I regret to say, that … .
- I’m afraid I didn’t quite catch ... (what the speaker said / meant ...).
- My impression of the presentation is (un- / hardly / quite) favourable.
1.6 DIALOGUE 1
Read and translate the following dialogue:
Import and Export
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A. |
Pleased to meet you, Mr. Bently. Let’s get down to business. You see, an import/export transaction usually requires a lot of complicated documentation. |
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B. |
True. Unfortunately, I’m not quite at subject. Many different arrangements have to be made and this can be difficult when one firm is dealing with another firm on the other side of the world. Well, I’d just like to say that there should be a lot of specialists involved. |
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A. |
I take your point. Let’s dot the “i”s and cross the “t”s. Firstly, there should be a shipping agent and/or a freight forwarder (forwarding agent) who takes responsibility for the documentation and arranges for the goods to be shipped by air, sea, rail or road. Moreover, these services may also be carried out by the supplier’s own export department, if they have the expertise. |
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B. |
Oh, definitely. Also there are airlines, shipping lines, railway or road haulage firms to transport the goods. |
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A. |
Sure. We must bear in mind that both the importer’s and exporter’s banks will be involved in arranging payments if a letter of credit or a bill of exchange is used. |
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B. |
And what about customs officers who may examine the goods, check import or export licences and charge duty and/or VAT? |
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A. |
Yes, of course. At this point we must consider the manufacturer or a chamber of commerce to issue a Certificate of Origin, if this is required by the importer’s country. |
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B. |
Sorry to butt in, but why don’t you mention an insurance company or insurance broker to insure goods in transit? |
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A. |
Oh, it just escaped my mind ... I should also mention an export credit insurance company (such as Hermes5* in Germany). |
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B. |
Will there be a lawyer if a special contract has to be drawn up? |
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A. |
That’s right. This brings me to my next point. You see, many import or 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 this company imports the goods. Alternatively, the deal may be arranged through an importer’s buying agent or a buying house acting for the importer, or through an export house based in the exporter’s country. In this situation, the exporter sells directly to a company in his own country, who will then export the goods. |
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B. |
And what about prices for exports? |
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A. |
Prices for exports may be quoted in the buyer’s currency, the seller’s currency or in a third “hard” currency (e.g. US dollars, euros or yens). The price quoted always indicates the terms of delivery, which conform to the international standard Incoterms. The terms of delivery that are most common depend on the kinds of goods being traded and the countries between which the trade is taking place. |
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B. |
I see... Surely you’d admit that methods of payment also vary. |
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A. |
Fair enough. Let me clarify that for you. Methods of payment may be on a cash with order basis (or cash deposit with order), on open account (as in most domestic trade, where the buyer pays the supplier soon after receiving the goods), by irrevocable letter of credit or by bill of exchange. Exporters and importers often prefer the security of payment by confirmed irrevocable letter of credit when dealing with unknown firms in distant countries. |
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B. |
I always thought that trade between countries within a free trade area and within the European Union is simpler, and many firms pay for goods by cheque and use their own transport to deliver goods across frontiers. |
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A. |
Er, yes, no special customs documentation is required for trade between firms in different parts of the EU, but VAT rates vary from country to country. Well, that’s all I have today for the moment, thank you for listening. |
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B. |
Thank you for clarifying the matter for me. |
Task 1. Report the dialogue. Use the following reporting verbs:
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Task 2. Work with a partner. Look at the dialogue and discuss what A. and B. say about the following subjects.
Task 3. Say it in English:
• организовывать перевозку грузов по железной дороге
• я не очень разбираюсь в этом вопросе
• страховать транспортируемые товары
• к тому же, в дополнение
• страховое свидетельство
• безотзывный аккредитив
• коносамент
• компания, страхующая экспортное кредитование
• сертификат происхождения товара
• транспортная морская накладная
• расставим точки над "i"
• закупочная организация
• экспедиционное агентство, организующее перевозки партий грузов или перерабатывающее экспортно-импортные грузы
• налог на добавленную стоимость в разных странах разный
• железнодорожное или автодорожное агентство
• торгово-промышленная палата
• оплата с наличным расчетом при выдаче заказа
• экспедитор, агент по погрузке и отправке товаров
• переводной вексель
• соответствовать принятой в мире международной торговой терминологии
• взимать таможенную пошлину и/или налог на добавленную стоимость (НДС)
• доставлять товары за границу
• условия поставки
• указывать цены в твердой валюте "третьей страны"
• таможенник
Task 4. Produce your own dialogue about documents needed in international trade and the meaning of Incoterms. Make a full use of the underlined helpful phrases from Dialogue 1 and Supporting Materials:
Supporting materials
Documents needed in international trade (Import and export)
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Incoterms6*
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Group 1 – The E Term (Departure) |
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EXW |
This price is the Ex-Works cost of the goods. The buyer arranges collection from the supplier and pays for freight carriage and insurance. |
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Group 2 - The F terms (Free, main carriage not paid by the seller) |
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FCA |
The Free Carrier price includes all costs to a named point of loading onto a container. The buyer pays for onward shipment and insurance. |
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FAS |
This price includes all costs to a named port of shipment Free Alongside Ship. The buyer pays for loading, onward shipment and insurance. |
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FOB |
This price includes all costs of the goods Free On Board a ship (or aircraft) whose destination is stated in the contract. The buyer pays for onward shipment and insurance. |
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Group 3 – The C terms (Main carriage paid by the seller) |
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CFR |
This price includes Cost and Freight, but not insurance, to a named port of destination in the buyer’s country. |
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CIF |
This price covers Cost, Insurance and Freight to a named port of destination in the buyer’s country. |
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CPT |
The cost and transportation of the goods, Carriage Paid to a named destination in the buyer’s country. |
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CIP |
The cost and transportation of the goods, Carriage and Insurance Paid, to a named destination in the buyer’s country. |
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CIP |
Carriage and Insurance Paid To a named place of destination. |
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Group 4 – The D terms (Delivered / Arrival) |
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DAF |
The cost, insurance and transportation of the goods Delivered At Frontier. |
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DES |
The cost, insurance and transportation of the goods Delivered Ex-Ship to the named port of destination. |
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DEQ |
The cost, insurance and transportation of the goods, unloaded from the ship and Delivered Ex-Quay to the named port of destination. |
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DDU |
The cost, insurance and transportation of the goods Delivered Duty Unpaid to the named port of destination. |
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DDP |
The cost, insurance and transportation of the goods Delivered Duty Paid to the named port of destination. |
Task 5. Match each group of Incoterms to the four paragraphs. Expand on them.
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Group 1 - The E Term |
Paragraph _________ |
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Group 2 - The F terms |
Paragraph _________ |
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Group 3 - The C terms |
Paragraph _________ |
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Group 4 - The D terms |
Paragraph _________ |
A
The seller arranges and pays for the pre-carriage in the country of export. The goods are delivered to a carrier appointed by the buyer. The buyer arranges insurance against damage to the goods in transit.
B
In this group the seller arranges and pays for the main contract of carriage. In some of the terms the seller arranges insurance against damage to the goods in transit.
C
These terms maximize the seller’s cost and risk, as he has to make the goods available at the agreed destination. The seller bears the costs and risks of bringing the goods to the country of destination, and arranges and pays for insurance against damage to the goods in transit.
D
Under this shipping term the seller makes the goods available for collection by the buyer at the seller’s own premises. This term involves the least risk for, and requires the least effort by, the seller, but should not be used where the buyer cannot carry out export formalities.
DIALOGUE 2
Read and translate the following dialogue:
Trade Restrictions
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A. |
Judging by what I’ve derived from our lectures, many nations impose limits on trade. I managed to single out the four main types of trade restrictions: tariffs, subsidies, quotas and cartels where a tariff is a tax placed on imported goods. |
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B. |
As a matter of fact, tariffs are of two kinds - revenue and protective. A revenue tariff raises money for the government. For this reason, revenue tariffs are generally low so that consumers will continue to purchase the taxed goods. However, protective tariff taxes an imported good so that the price becomes as high as, or higher than, the similar domestic manufactured product. |
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A. |
I take your point. Protective tariffs make imported products more expensive and encourage people to buy goods produced in their own country. |
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B. |
Definitely. For example, if the cost of producing a pair of shoes is $20 in the United States and $10 in Italy, Italian shoes could be cheaper. Americans then would buy Italian shoes to save money. To encourage domestic shoe purchase, the federal government could levy a tariff of $15 per pair on imported Italian shoes. |
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A. |
Then a subsidy can be thought of as a tariff in reverse. Instead of taxing the foreign product, the government gives a subsidy to the industry that is suffering from foreign competition. In the shoe example, the government would grant a subsidy to the nation’s shoe industry. Shoe manufacturers could then meet some of their production costs through the subsidy and charge less than foreign producers for their products. |
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B. |
Indeed. Still, I suppose a nation can limit the amount of goods that can be imported into the country. |
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A. |
It’s called a quota. A quota on shoes, for example, might limit shoe imports to 100 million pairs a year. If Americans buy 500 million pairs of shoes each year, most of the market will go to American producers. Usually, quotas are imposed when tariffs and subsidies have failed to protect domestic industries from foreign competition. |
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B. |
But I know that sometimes a group of companies or countries band together to restrict competition. May be that is called “cornering the market”? |
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A. |
Ask me another7*. Wait though. I believe you are wrong. It’s called a cartel. The members of the cartel agree to limit the supply and control the price of a particular good. Members meet regularly to decide how much to sell and how much to charge for their product. |
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B. |
At all events, I am all for tariffs, because to my mind they provide domestic job protection and aid industrial development. I also believe that tariffs are important to the national defence. |
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A. |
It may well be true. Sometimes tariffs and subsidies are applied on a regional rather than a national basis. For example, in the late 1950s six Western European nations - Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany - formed the European Economic Community (EEC), usually called the Common Market. Later, Denmark, Great Britain, Greece, and Ireland also joined. The EEC established common tariffs against products from non-EEC nations. At the same time, the countries eliminated tariffs among themselves. |
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B. |
What is more, specialisation and trade result in interdependence. Many nations do not want to depend on other countries for products necessary to national defence, such as oil and steel. |
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A. |
Still I don’t doubt that all trade restrictions limit world trade, reducing the total number of goods and services produced. Trade restrictions also raise prices. |
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B. |
By the way, does GATT have anything to do with the problem? |
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A. |
Pardon? |
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B. |
I mean the International General Agreement on Tariffs and Trade . |
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A. |
Oh, yes. As far as I know, it encompassed 22 countries in 1947, later the group expanded to somewhat about 100 countries, unfortunately, I am not quite at subject. |
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B. |
I know that signers of the GATT met periodically in an effort to lower tariffs and settle trade disputes. The GATT also restricted member countries from banning or limiting imports from the other participants. In 1995 the World Trade Organization became the successor to it. |
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A. |
I am overwhelmed. 8** We have got a real recital of facts and surmise. |
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B. |
Sure. Let’s call it a day. 9*** |
Task 1. Report the dialogue. Use the following reporting verbs:
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Task 2. Work with a partner. Look at the dialogue and discuss what A. and B. say about the following subjects.
Task 3. Say it in English:
Task 4. Use Supporting Materials to continue the dialogue about the World Trade Organization. Search the Internet to find further information about the WTO. Make use of helpful phrases from Dialogue 2:
The WTO IN BRIEF
History:
The World Trade Organization came into being in 1995. The WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War. So the multilateral trading system that was originally set up under GATT is already 50 years old. The past 50 years have seen an exceptional growth in world trade. Merchandise exports grew on average by 6% annually. GATT and the WTO have helped to create a strong and prosperous trading system contributing to unprecedented growth. The system was developed through a series of trade negotiations, or rounds, held under GATT. The first rounds dealt mainly with tariff reductions but later negotiations included other areas such as anti-dumping and non-tariff measures. The 1986-94 Uruguay Round led to the WTO’s creation. In February 1997 agreement was reached on telecommunications services, with 69 governments agreeing to wide-ranging liberalization measures that went beyond those agreed in the Uruguay Round. In the same year 40 governments successfully concluded negotiations for tariff-free trade in information technology products, and 70 members concluded a financial services deal covering more than 95% of trade in banking, insurance, securities and financial information.
The organization:
The WTO’s overriding objective is to help trade flow smoothly, freely, fairly and predictably. It does this by:
The WTO has more than 130 members, accounting for 90% of world trade. Over 30 others are negotiating membership. Decisions are made by the entire membership and typically by consensus. A majority vote is also possible but it has never been used in the WTO, and was extremely rare under the WTO predecessor, GATT. The WTO’s agreements have been ratified in all members’ parliaments. The WTO’s top level decision-making body is the Ministerial Conference which meets at least once every two years. Below this is the General council (normally ambassadors and heads of delegation in Geneva, but sometimes officials sent from members’ capitals) which meets several times a year in Geneva head-quarters. The General council also meets as the Trade Policy Review Body and the Dispute Settlement Body. At the next level, the Goods Council, Services Council and Intellectual Property (TRIPS) Council report to the General Council. Numerous specialized committees, working groups and working parties deal with the individual agreements and other areas such as the environment, development, membership applications, regional trade agreements, relationship between trade and investment, the interaction between trade and competition policy and transparency in government procurement.
Reading for Cross-cultural Associations
a. Read the texts below.
A
Viewed as an employer and wealth creator, Britain’s financial system is the biggest part of the British economy. Incredibly, it has overtaken industry as the country’s leading exporter (or earner of foreign currency). And the City has become so big that it dominates the economy of southern England: property prices, services ranging from restaurants to car dealers, and even education depend on the City’s fortunes. More international telephone calls are made to and from London than any other city in the world. More airline passengers pass through London than any other place. Helped by increasing popularity of English as an international language (English is the most widely learnt second language) and London’s position mid-way between the Asian and American time zones, the British financial institutions seem more dynamic than ever.
But some big clouds loom on the horizon. One is technology. Electronic communications can cut out many of the stages through which business used to pass.
The other big cloud is Economic and Monetary Union, the European Union’s single currency. The point of EMU is to make business between the EU members easier and to weld the still disparate EU members into the world’s biggest single economy, overtaking the United States. The assumption is that a single currency will intensify competition between financial institutions in different countries and that the consumer will benefit. British financial institutions ought to flourish under EMU, backed as they are by the City and Europe’s most sophisticated financial system.
But it is uncertain whether or when Britain will join EMU. Some experts fear that staying outside the single currency will cut the country off from its European neighbours. European exchanges are banding together to take advantage of EMU and to compete with London. The City’s international status could suffer, and the ability of the country’s financial institutions to meet the needs of ordinary British people might also deteriorate. Other experts believe that Britain’s financial institutions can survive and even prosper outside EMU.
B
With its open economy, the Netherlands was among the original founders of the European Union. Ever since, it has advocated further integration, although in recent years since Euro-scepticism has set in just like elsewhere, but that seems to be related to the functioning of the EU rather than to the idea as such. People from other countries cannot fail to notice this international attitude.
Think globally, act locally. Even smaller Dutch firms are quite aware of the necessity of adapting their products, their advertising and the business behaviour of their representatives in order to meet the standards and the requirements of local markets. In response to these needs, governmental and business organisations in the Netherlands provide valuable export advice; culture and language training institutes cater to the business world; and literature and statistics abound on even the remotest countries.
The Dutch government is keen to play a global role, supporting international collaboration not only in the European Union, but also in NATO and various UN peace missions. At the same time, we shouldn’t overlook the fact that this country is also the world’s largest arms exporter and one of the world’s largest importers of tropical hardwoods (which, being water-resistant, is used both in the construction of housing, boats and port equipment).
In the rapidly expanding EU, the Netherlands is now merely one of many small nations (albeit10* one with large economy that has always been a loyal net-contributor11). In broad outline, this country remains firmly rooted in the European Union and the world community, with an open eye to all sides, balancing the commercial interests of the economy with the human ideas of peace, development and equal opportunities for people everywhere.
Yet, at the same time, the policy for admitting asylum-seekers has hardened in recent years. And with the enlargement of the EU toward Central Europe in 2004, the Netherlands was one of the countries trying to protect its labour market by keeping out workers from the new member states for the first two years. Further, European elections result in low participation. Instead of enthusiasm about a new start for this old continent, there are concerns about finance, employment and safety close to home.
b. Draw a parallel between the United Kingdom, the Netherlands and the Russian Federation to cover the points in the following chart. Surf the Internet for keywords EU, EMU, European exchanges, the City, Eurozone, Maastricht Treaty.
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the United Kingdom |
the Netherlands |
the Russian federation |
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The importance of the national financial system for the economy of the country |
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The role in the European financial sector |
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The attitude to the EU and EMU |
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Factors of economic growth |
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Priorities in advantages and disadvantages of collaboration between European nations |
1.7 CASE STUDY & ROLE PLAY
Case 1
“Coburn Tool Corporation, an American manufacturer of large and small machine tools and parts, gears, valves, and bearings, was a major supplier to industries and companies world-wide. Because of the rise of the U.S. dollar on exchange markets and serious financial crises in many of the countries in which Coburn did business, sales, particularly to Latin America, began to decline.
A major market for Coburn’s products had until recently been Brazil. For instance, in 1980 sales to that country’s industries were $640,000; but by 1983 sales had declined to just $183,000.
This serious problem seemed to have little solution because of Brazil’s chronic credit problems and lack of foreign exchange.
In the fall of 1984, however, a unique proposition was received at Coburn’s head office near Cleveland, Ohio, from a Brazilian commodities broker, Companhia Internacional de Comercio, S.A. (CIC). CIC’s offer was essentially this: in exchange for US $ 400,000 in assorted gears, Coburn would receive the equivalent in Brazilian shoes, which it could sell in the American market.”
Case Analysis
1.7.1 Develop the following ideas.
1. The lack of foreign exchange is causing problems for Third World countries .
(a recent phenomenon in international trade, chronic shortage of foreign exchange in developing countries, the lack of understanding how desperate many developing countries are)
2. The solution to the problem is countertrade.
(countertrade / barter (the exchange of goods for goods); a worldwide phenomenon; to be concentrated between Western manufacturing countries and developing countries; to send highly specialized items - cars, computers, cameras; a middleman representing a developing country)
3. Coburn has to decide whether to take the risk. John McEnroe’s first reaction - finding the proposal ludicrous - changes on further consideration.
( to be worthwhile to accept something; in order to increase sales; risks involved on both sides; to find itself with merchandise it cannot sell; to find a way to sell something.; to ensure a return on the sale)
Critical Thinking Tasks
1.7.2
A. Search the Internet for keywords countertrade, barter, offset, buyback, switch trading, counter purchase. Use the obtained information in your case analysis.
B. Describe a countertrade exchange between two countries. Explain the possible problems associated with countertrade.
C. Say how countertrade differs from the traditional method of trading products between countries. Give reasons why countries engage in countertrade.
D. Prepare a report on the case. Use the instructions below.
Preparing reports on a case
The following guidelines will help you write an effective case analysis.
First, in business communications a short report is usually considered better than a long report. This does not mean that in your report you can skip key points, but rather that you state relevant points clearly and concisely. Do not include trivial matters.
Second, the report should be well written. It should be typed and not contain spelling or grammatical errors. The report you hand in for class should be equivalent in quality to a report you would write for your boss, a senior manager of a business company.
A well-written report would contain the following elements:
Preparation of an oral case report should include the following:
1.7.3 Say it in English using the word combinations from both the Case-study and Role-play sections:
Role-Play 1
Situation
Coburn Tool Corporation receives a unique proposition from Companhia Internacional de Comercio: in exchange for US $ 400,000 in assorted gears, Coburn would receive the equivalent in Brazilian shoes, which it could sell in the American market. Coburn’s first reaction was to reject the deal; indeed, the overseas sales manager, John McEnroe, found the arrangement almost laughable. On further consideration, however, he began to think more seriously about the proposition. Four hundred thousand dollars was a significant amount of money. But what would a machine tool manufacturer do with shoes? Garcia is experienced at dealing with Western businessmen and has quick answers to all of McEnroe’s questions, while the latter is unfamiliar with barter. Garcia mentions American corporate giants like Citicorp, Sears, GM, so as to show McEnroe that companies much larger than his own got involved in countertrade and to make it seem less risky. Garcia makes the proposal more attractive by telling McEnroe that he can even earn some extra money through a commission. Garcia is going to send a tentative order for the gears, making McEnroe show that he has a firm offer for a large amount of money.
Task
Act out a series of telephone conversations between John McEnroe, Overseas Sales Manager, Coburn Tool Corp. and Jose Garcia, Presi-dent, Companhia Internacional de Comercio. After the first conversa-tion Mr. McEnroe consults his colleague Alain Malone. Rose Ward, Mr. McEnroe’s secretary, receives telephone calls and does secretarial jobs.
John McEnroe: Your first reaction was to reject the deal; indeed, you found the arrangement almost laughable. On second thought you and your associates decided you might as well investigate it. You are of course happy to sell $400,000 worth of gears, but you do not know what to do with shoes. Garcia’s idea of setting up a trading subsidiary sounds strange and you are afraid your boss will only laugh you out of office. But then you try to find out how the deal will work and what would happen if you are unable to sell the shoes. You don’t know what a good shoe is and what a good price is. The whole business sounds very risky. But the hint about an extra profit makes the idea more attractive and you ask Garcia to let you talk to some commodity specialists and to your associates. If they feel you can move the shoes, you might consider it. It’s natural that Coburn will be reluctant to ship $400,000 worth of gears without first having some assurance they will actually get paid. So you ask Garcia to send you the specs (specifications) on the shoes together with some samples; also a breakdown on what gears they want to purchase.
Make use of the helpful phrases:
Garcia: You focus your interlocutor’s attention on the fact that countertrade is one way Brazil has managed to cope with its foreign exchange problems. In your opinion Coburn can arrange to transfer title to a middleman, i.e. an importer in the U.S., or follow the example of Sears, G.M. or Citicorp and set up a trading subsidiary of their own. Then you explain to John McEnroe how the deal will work: Coburn Tool Corporation sends CIC $400,000 in parts and CIC sends them the title for $400,000 in shoes. When Coburn sells the shoes, CIC will deliver them wherever they want and Coburn won’t have to house them. The shoes are excellent and the price is extremely low. A commodities specialist should be able to evaluate the product and sell it. But the point in your reasoning is that John McEnroe can make an extra profit on this deal, taking a small commission on the sale of the shoes, say 2-3 %. You will get the shoes off to Coburn right away and also send a tentative order for their gears.
Make use of the helpful phrases:
Alain Malone: You chief wants to find out how the deal will work and what would happen if you are unable to sell the shoes. You are young and advantageous and forward-looking. That’s why you do not reject the offer and make a preliminary desk research. Countertrade is actually a form of currency exchange. It may even be considered as a form of bartering between a developed country and developing countries. Such trading entails a high level of risk and requires a thorough understanding of markets in all countries involved. You are quite aware that it is not a method of trading that businesses in developed countries favour. Still, that may be the only way to trade with a country that has few dollars. You suggest that you refer to a commodities specialist so that he could evaluate the product and help sell it.
Make use of the helpful phrases:
Rose Ward: When you answer the phone, your response depends on two things:
If the call you receive is a direct incoming call you state the name of your company:
“Coburn Tool Corporation’s. Good morning.”
If the call you receive is via a private exchange switchboard you state your name and department
“Head office. Miss Ward speaking.” ,or “Miss Ward. Head office.”
You should not just say “Hullo”. This causes confusion, does not help the caller, and wastes time.
Make use of the helpful phrases:
Making a decision
Your decision:
Appendix
Complete the secretary’s message form for the telephone conversation:
MESSAGE FORM
For …………………………………………………………………………
From ……………………………………………………………………….
Of ………………………………………………………………………….
Tel No. …………………………………………………………………….
|
came to see you |
sent telex message |
urgent |
please ring him / her |
|
telephoned |
appointment to see you |
telex back |
will phone later |
|
cabled |
wants to see you |
will write |
will come again |
Message ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Date …………………………………… Time ……………………………….
Received by ………………………………………………………………….
Note:
In international calls, the spelling of names often causes difficulty. Secretaries use the official Post Office alphabetic code, and if you are spelling a word to an English-speaking person on the phone, they will understand you if you use this code.
The official Post Office alphabetical code is:
|
A |
for Andrew |
H |
for Harry |
O |
for Oliver |
V |
for Victory |
|
B |
for Benjamin |
I |
for Isaac |
P |
for Peter |
W |
for William |
|
C |
for Charlie |
J |
for Jack |
Q |
for Queenie |
X |
for X-ray |
|
D |
for David |
K |
for King |
R |
for Robert |
Y |
for Yellow |
|
E |
for Edward |
L |
for Lucy |
S |
for Sugar |
Z |
for Zebra |
|
F |
for Frederick |
M |
for Mary |
T |
for Tommy |
||
|
G |
for George |
N |
for Nellie |
U |
for Uncle |
Case 2
“During 1982, the dollar rose against other major currencies to its highest level since the beginning of floating exchange rates in 1973. The strength of the dollar provided some benefits to the economy by reducing import prices and controlling inflation. On the other hand the strong dollar caused severe problems by decreasing the cost competitiveness of United States exports.The rise of the dollar was associated with a large rise in the production costs of United States firms relative to foreign competitors. This rise in relative costs has at least temporarily reduced the international competitiveness of United States industry dramatically.
Imported Japanese cars accounted for almost one-forth of all cars sold in the United States in the early 80s. During the recession from 1979 through 1982, sales of American cars declined. In 1982, sales of domestically produced cars reached a 24-year low of 5.7 million; unemployment in the American auto industry exceeded 20 per cent. As a result of declining sales, the United States asked Japanese car manufacturers to limit their exports to the United States. In April 1981, the Japanese agreed to a voluntary quota of 1.7 million cars per year for three years. In April 1984, the agreement was extended a fourth year and the quota increased to 1.85 million cars. In 1985, the agreement ended. Japanese automakers immediately announced their intention to increase car exports to the United States.
Trade restrictions on Japanese cars have been debated in the United States for over 10 years.”
Case Analysis
1.7.4 Develop the following ideas:
1. In general, nations realize that specialisation and trade benefit everyone.
( the advantages of global trade; the production of more goods; the improvement of living standards in the trading countries; the increased operating efficiency of the world economy)
2. In the 1980s the strong dollar caused severe problems for the United States economy.
( to rise against other major currencies; floating exchange rates; to provide benefits to somebody/something. by doing something.; to reduce import prices; to decrease the cost competitiveness of something.; to control inflation; a rise in the production costs: to reduce the competitiveness of something.)
3. Tariffs and quotas can stop foreign competitors from putting established domestic industries out of business.
( to use dumping - selling a product in a foreign country at a price lower than the cost in the home market; to gain an unfair share of a nation’s markets; to be forced out of business; domestic manufacturer; the foreign supplier; to be free to raise prices)
4. Trade restrictions also may protect an industry for which the country does not have an advantage.
( the necessity to produce the best product at the lower price; a trade deficit to be inefficient; to become uncompetitive in world markets; the imbalance in trade with Japan;)
1.7.5 Say it in English:
Critical Thinking Tasks
1.7.6 A. Find examples that show how trade restrictions affect multinational corporations.
B. In and around your house look for any major items not made in the Russian Federation. Explain why these items, rather than their Russian-made counterparts, were purchased.
C. Explain how the European Economic Community (WTO, NAFTA, etc. …) influences trade around the world.
D. Prepare a report on the case.
Role-Play 2
Situation
Take part in a TV panel discussion programme on trade restrictions on Japanese cars. A TV commentator interviews representatives of a government panel and an impartial panel. Study the arguments opponents used to support their positions. Douglas Frazer, president emeritus of the United Auto Workers and Reubin Askew, United States special representative for trade negotiations between 1971 and 1981, disagree on limiting imports of Japanese cars.
Barry Sting, a popular TV commentator. You are a well-known showman. You organised a panel discussion programme on TV. Several members of the public are invited to give their opinions. The questions for discussion were sent in by the viewers. Authors of the most interesting questions were invited to the studio. The chairperson (you) reads out the questions and directs the panel. Open the discussion by describing the members of the panel. Elect a buzz group – a small group of 3-5 persons to work out and note down all possible arguments and opinions in favour or against them. A buzz group will also present a summary of the discussion at the end of the programme. Mind that interviewing people involves asking for questions and expressing personal opinions. Open-ended-questions should prevail over close ones (requiring “yes” or “no” answers). Be polite yet firm.
Make use of the helpful phrases:
Douglas Frazer thinks the United States government should pressure the Japanese to build cars here in order to save jobs for United States workers. Although Frazer supports free trade in principle, he thinks that free trade no longer operates fairly. The Japanese impose many subtle restrictions on trade. The United States open market policy has worked against the job security of the United States auto worker. Frazer acknowledges that United States car makers share part of the blame for the flood of Japanese imports. United States companies continued to manufacture more profitable large cars too long, neglecting the small car market. Frazer fears that if some restraint is not put on the Japanese, the flood of imports will increase until the Japanese have exhausted their capacity to export cars. Frazer claims that he does not approve of trade restrictions that limit consumer choices. Frazer would, in certain cases, however, recommend either a marketing agreement to limit imports or legislation requiring that Japanese car manufacturers whose sales volume in the United States is high use numerous parts made in the United States. If such measures were not successful, Frazer would support tariffs or quotas. As layoffs in the three big United States companies continue, Frazer thinks the time has come for the administration to get tough. If the United States administration would pressure the Japanese companies, it would be a step in the right direction.
Make use of the helpful phrases:
Reubin Askew expresses concern over the high levels of unemployment in the United States automobile industry. Unlike Frazer, he is not in favour of imposing any form of import restrictions. Askew believes that such restrictions would have an adverse effect on the United States economy. Askew believes that the number of jobs created by import restrictions would be very small, whereas the costs of even temporary limits on imported cars would be very high. Askew cites the council of Economic Advisers’ estimate that every job gained by import restraint would add about $ 100,000 in costs to the consumer. Askew foresees a gradual recovery of the United States automobile industry as manufacturers become responsive to public demands for smaller, more fuel-efficient cars. He points to one study estimating that the imported share of the car market could be cut from 26 percent to 10 percent within a decade. Askew thinks that the Japanese are afraid the United States automobile industry will regain its previous market share. Therefore, the Japanese are reluctant to invest in car production in this country. In addition to government pressure on the Japanese to invest in the US, Askew points to government efforts to get the Japanese to open up their market. Although the Japanese have no tariffs on cars, they do impose a 6 to 8 percent tariff on car parts. The Japanese also require that imported cars be individually tested. The United States government is making some progress in persuading the Japanese to remove these trade restraints.
Make use of the helpful phrases:
Martin Feldstein, Chairman of the Council of Economic Advisers: Concern over the international competitiveness of the USA is high. You attribute poor performance to two courses – failures of management and the support given to foreign businesses by their governments. Contributing to the view of declining competitiveness is the United States deficit in merchandise trade, especially the imbalance in trade with Japan.
Make use of the helpful phrases:
TV-viewer – 1 – When D. Frazer mentioned that United States companies continued to manufacture more profitable large cars too long, neglecting the small car market, you remark that, as United States consumers began to buy smaller cars, Japanese manufacturers met their needs. You are deeply dissatisfied that the Japanese got an exclusive hold on the small-car market. You totally agree with Frazer who fears that if some restraint is not put on the Japanese, the flood of imports will increase until the Japanese have exhausted their capacity to export cars.
Make use of the helpful phrases:
TV-viewer – 2 – When Frazer expresses fear that the flood of imports will increase until the Japanese have exhausted their capacity to export cars, you support his view by saying that since consumers tend to stay with a car if they are satisfied with its performance, the United States automobile industry could suffer permanent damage.
Make use of the helpful phrases:
TV-viewer – 3 as Frazer himself does not approve of trade restrictions that limit consumer choices. He asserts that the United States automobile industry needs the competition and discipline that the European and Japanese manufacturers provide. He refers to recent studies that suggest that between sixty and fifty per cent of the gains in productivity made in the West in the last half-century spring from better trained minds, from more research, and more systematic use of the economy’s brain power.
Make use of the helpful phrases:
TV-viewer – 4 agrees with Frazer that the time has come for the administration to get tough. Other industrialised countries have asked the Japanese to behave in a responsible manner, and the Japanese have responded. The speaker expresses concern over the international competitiveness of the United States. In his opinion United States business has steadily lost ground in the international marketplace. Contributing to the view of declining competitiveness is the United States deficit in merchandise trade, especially the imbalance in trade with Japan.
Make use of the helpful phrases:
TV-viewer – 5 approves of TV-viewer-4’s opinion and is also in favour of Askew’s idea that the Japanese are afraid the United States automobile industry will regain its previous market share. He thinks that as United States car companies become more competitive, foreign companies will find it harder to sell their cars in this country.
Make use of the helpful phrases:
TV-viewer – 6 supports Askew’s idea that import restrictions would have an adverse effect on the United States economy. You felt sure that limiting the number of imported subcompact cars would force consumers to either buy larger, less efficient cars or postpone buying until smaller cars become available. The high cost to the consumer would increase inflation. The use of larger cars also would raise gasoline consumption.
Make use of the helpful phrases:
TV-viewer – 7 believes, however, that foreign automobile manufacturers have a responsibility to invest here. He hopes that the government will continue to press the Japanese to make investments in this country.
Make use of the helpful phrases:
Making a Decision
In coming to a decision about this case, consider the following points:
What other factors should be discussed?
Your decision:
1.8 GRAMMAR BACK UP: The Infinitive
ANTICIPATION
Task 1
Familiarize yourself with the text and circle out the infinitives. Note different forms of the infinitives. Translate the text into Russian.
Some weeks ago a lorry carrying Harper & Grant’s goods was hi-jacked on the road. Now there is a further development of this which concerns the insurance. To be on the safe side, every firm insures itself against loss or damage to its property. Harper & Grant’s insurance brokers had arranged a blanket insurance with a syndicate of Lloyds underwriters. Blanket insurance means insurance which covers everything, a comprehensive policy. Lloyds is a huge insurance organization in London, grouped in syndicates. The underwriters employ a firm of adjusters to assess or value the loss or damage. The sum they give will not usually be as much as the full insured value of the goods or property. They will take into account, among other things, the depreciated value: for example, the value of the lorry has gone down, depreciated, because it is two years old. Harper & Grant have to make a statement at the end of an accounting period (say once a month or once a quarter) of the total value of goods. When the lorry was found, so to speak, abandoned, with its spoiled load of office furniture, the adjusters came in. However, in this case the lorry is a write-off, a total wreck and impossible to repair. But this does not concern Harper & Grant, because the lorry belonged to Andersons, the transport company from whom they hire vehicles. But the load of office furniture does concern them. They have already had to replace the load, which was wanted urgently in Scotland.
When a company, or a person, takes out an insurance policy it is, to say the least, an all-risks policy, that is, it insures the goods or property against almost anything that could happen. But most insurance companies put in some exceptions, like outbreak of war or Act of God (something out of ordinary which cannot be considered a normal risk). When an accident or robbery takes place the injured party puts in a claim to the insurance company. If the insurance company agrees to pay it is said to meet the claim. Notice, first you take out a policy, then you put in a claim, and the insurance company, you hope, agrees to meet the claim.
Task 2.
Translate the sentences into Russian paying attention to the function of the infinitive.
The infinitive as a subject
The infinitive as part of a predicate.
The infinitive as an attribute.
The infinitive as an object
The infinitive as part of a complex object.
The infinitive as an adverbial modifier:
a) of purpose.
b) of result.
The infinitive as parenthesis20*.
Note. Mind the following structures:
PRACTICE
Ask yourself these questions when checking the infinitives.
1. Is the verb followed by a full or bare Infinitive?
We often use the base form of a verb (go) as an infinitive. We call this form the bare infinitive because we use it without to. It should be distinguished from the to-infinitive, where we always use to in front of the base form of the verb (to go). The most common use of the bare infinitive is after modal verbs (He may/can/must go).
1.8.1 Insert to before the infinitive where required. Translate the sentences into Russian.
2. Which verbs are followed by Complex Object?
a. Some transitive verbs are followed by the object (a noun or pronoun in the objective case) with an infinitive attached to it:
Peter wanted Christopher (him) to go to the Moorland Valley.
Christopher saw the adjuster (him) assess the damage.
The underwriters made a firm of adjusters (them) value the loss.
Can you persuade the driver (him) to give us a lift?
Also after verbs of mental perception, such as: expect, know, believe, acknowledge, understand, admit, assume, deny, prove, etc.
We expect the transport company (them) to cover the loss to our property.
They watched the captain (him) sign the Bill of Lading.
You’d better insure the cargo.
I’d rather not be told the truth.
I’ll have you speak English in no time.
They are followed by a to-infinitive in the passive:
The hi-jackers were seen to unload the cargo.
d. Complex Object with a bare Infinitive is used after verbs make, let:
She made them send money back to relatives.
Let’s rent space in the cargo compartment of a ship!
Let’s purchase insurance, shall we?
The negative is:
Let’s not (insure our cargo). Or: Don’t let’s (insure our cargo).
They won’t let us sell the shares.
Make is followed by a to-infinitive in the passive:
They were made to send money back to relatives.
Let is not used in the passive; the forms to be allowed (to be permitted) are used instead.
We were allowed to make the claim.
e. We may use a bare infinitive or a to-infinitive after help and know. The use of a to-infinitive is more formal:
Our partner helped us (to) transport the goods.
Everyone in the company helped (to) build an extension.
We do not usually omit to after not.
How can I help Mr. Grant not to worry about the cargo?
We use to in the passive:
He was known to be released /to have been released by the gang.
f. When the verbs hear (=to learn), see (=to understand), feel (=believe , experience) express mental perception they cannot be followed by Complex Object, but require an object clause:
I hear (that) you have had successful talks.
1.8.2
a. Complete these sentences so that they refer to other people.
Model: I don’t want to speak to the adjuster. I want Tom to speak to him.
b. Rewrite these sentences to begin with the words in italics.
Model: He’d like to remit some money to his “old country”.
He can’t afford it.
He can’t afford to remit some money.
c. Supply suitable infinitive forms for the verbs given in brackets.
Model: Let’s buy Japaneese radios. (buy)
d. Rewrite these sentences in the passive voice.
e. Complete the sentences using an object +to-infinitive after the verbs.
Model 1: Take out an all-risks policy. My partner advised me to take out an all-risks policy .
Model 2: People know that he is an expert in risk analysis. People know him to be an expert in risk analysis.
Model 3: He claims that he is an expert in work study surveys. He claims himself to be an expert in work study surveys.
f. Chose the correct variant.
3. Is the infinitive or the ing-form used after the verbs of perception?
a. The bare infinitive generally refers to the complete action:
I watched the secretary type a letter on a paper with a printed letterhead.
(i.e. from start to finish)
b. The -ing form generally refers to an action in progress:
I watched the secretary typing a letter on a paper with a printed letterhead. (i.e. I saw part of the action)
c. We may use hear, observe, perceive, see in the passive + -ing or a to-infinitive:
She was seen executing the order.
She was seen to execute the order.
d. We may also use Past Participle as a part of Complex Object:
The freight forwarders watched the crates loaded.
1.8.3 Join these pairs of sentences, deciding when to use a bare infinitive or ing.
Model 1: Mr. Roberts was examining the furniture. Mr. Thorn saw him.
– Mr. Thorn saw him examining the furniture.
1. She was informing the beneficiaries. I heard her.
I heard _________________________________________________ .
2. The beneficiaries were instructing the bank manager. They were seen.
The beneficiaries were seen ________________________________ .
3. Mr. Roberts was reading the piece of paper stuck on the windscreen. Mr. Thorn saw it.
Mr. Thorn saw ____________________________________________.
4. A man in the transport café was asking what Andersons’ driver was carrying. The barman heard that.
The barman heard ____________________________________.
5. The newcomer was looking through the catalogues very thoughtfully.
Elizabeth Corby noticed that.
Elizabeth noticed _________________________________________.
6. The operators were showing the new machines in operation. The visitors of the exhibition watched it.
The visitors of the exhibition watched _______________________
7. Christopher Thorn was making his comments about the confidential file. Because of the noise in the room nobody heard that.
Nobody heard ____________________________________________.
Model 2: Mr. Roberts examined the furniture. Mr. Thorn saw him.
– Mr. Thorn saw him examine the furniture.
1. The typist said the shipping documents were enclosed. She was heard.
The typist was heard _______________________________________.
2 They discussed the invoice in question. I listened to them.
I listened ______________________________________________ .
3. One of the clerks told a lie. Everybody heard it.
Everybody heard __________________________________________.
4 Fenella made a lot of spelling mistakes in the letters. J.Martin noticed it.
John Martin noticed ________________________________________.
5. The customs officer examined the goods. We saw it.
We saw ________________________________________________.
Model 3: The furniture was examined. Mr. Thorn watched him.
– Mr. Thorn watched the furniture examined.
1. The goods were loaded on the steamer. The ship owner saw it.
The ship owner saw the goods __________________ .
2. The workers packed the crates. I saw it.
I saw the crates ______________ .
3. The captain signed the Bill of Lading. The seller watched it.
The seller watched the Bill of Lading _____________ .
Model 3: Mr. Grant wanted John to comment on the amount spent.
- Mr. Grant asked John to comment on it.
- Mr. Grant asked for the commentary.
- Mr. Grant asked for the commentary to be made.
4. What do we use after “have” + object?
a. When we cause someone to do something for us, we use have + object + bare infinitive:
Have the next client come in, please.
We may also use have + know, have + believe:
I’ll have you know I’m the company secretary.
b. We use have + object + -ing to refer to intended results, and unintended consequences:
I’ll have you speaking English in no time.
Be careful! You’ll have the customers complaining.
1.8.4 Use the bare infinitive or the -ing form after have in these sentences.
Model: Have him bring the complaints about unexecuted orders.(to bring)
(We cause someone to do something for us)
Model: We have people complaining about unexecuted orders all hours. (to complain)
(We speak about intended results or unintended consequences)
5. What is Complex Subject and when do we use it?
The subject of the sentence is sometimes expressed by a noun (or pronoun) and an Infinitive which follows the predicate. Although the noun (or pronoun) and the Infinitive do not stand together, they are closely connected and form a Complex Subject, which is used:
The customers were requested to be ready by 7 o’clock.
They were ordered to cancel the deal.
They were seen to take out a policy at the Lloyds.
He was believed to have a letter of credit confirmed on the London bank.
This company is said to be set up as a trading subsidiary.
He appears to be very enterprising.
1.8.5
A. Complete the following sentences using a Complex Subject.
C. Translate the following. Sentences. Pay attention to the way the Complex Subject is translated.
REVISION
Exercise 1
Translate into English, using the Infinitive.
Exercise 2
Translate into English, using Complex Object where possible.
Exercise 3
Translate the following sentences using the Complex Subject.
9. Мистер Грант наверняка проверил репутацию страховой компании. Сообщалось, что он оформил полис комбинированного страхования. Он наверняка не отправит товар без страховки, покрывающей все риски.
10. Полагают, что фирма “Харпер и Грант” выдает выписку по счету в конце отчетного периода (раз в месяц или раз в квартал) на полную стоимость всех товаров, которыми занимается фирма.
11. Гектора Гранта вынудили позволить Бобу Хардиману работать до его выхода на пенсию.
12. Так как ущерб, нанесенный грузу, вызван халатностью водителя транспортной компании Андерсонс, страховщики компании Ллоидс не будут нести ответственность за убыток.
13. В конце концов, заказчиков заставили подтвердить дату платежа.
14. Кажется, Ваша выписка по нашему счету от 25 августа не соответствует нашим записям.
15. Наши партнёры наверняка подпишут контракт. Говорят, что они согласились на скидку в 1,5%.
Exercise 4
Choose the only correct answer. Use the Complex Object and Complex Subject.
1. During the winter, the Bahamas would like … large numbers of tourists who spend money for hotel accommodation, meals, taxis, and so on.
(A) attract (C) to attract
(B) attracted (D) to be attracted
2. Tourism is known … another form of invisible trade.
(A) be (C) to have been
(B) being (D) to be
3. The railroads of the United States and South America are said … by British capital.
(A) to have been build (C) have been built
(B) to have been built (D) to have been building
4. Peter made Christopher Thorn … to the Moorland Valley and … his opinion of the damage.
(A) to go up … give (C) has gone … has given
(B) go up … give (D) go up …gives
5. The Managing Director ordered … without further delay.
(A) to type the letter (C) the letter to be typed
(B) the letter being typed (D) the letter be typed
6. Mr. Morgan was made … that their firm had put “Harper & Grant Ltd “ in a nice mess.
(A) to understand (C) to have understood
(B) understand (D) have understood
7. Have you heard the secretary … our partners?
(A) to phone (C) have phoned
(B) phone (D) phoned
8. Mr. Grant was heard … the way he had managed to salvage the lot of office furniture.
(A) explain (C) explaining
(B) be explaining (D) to have been explaining
9. The goods are reported … since early morning.
(A) to have been examined (C) to be examined
(B) to have been examining (D) to be examining
10 Everybody heard his name … during the negotiations.
(A) to be mentioned (C) be mentioned
(B) mentioned (D) to have been mentioned
11. She seems … the letter already. She looks happy.
(A) to have been reading (C) to have read
(B) to be reading (D) to read
12. Hector Grant was heard … William Buckhurst to discuss the vital problems concerning the missing lorry full of office furniture.
(A) summon (C) to summon
(B) to have summoned (D) have summoned
Exercise 5
Render the following into English.
Проблемы экономического развития отдельных стран мира, а также глобальные проблемы мирового развития сделали необходимым международное сотрудничество и международное разделение труда для успешного решения проблем национального, социального и экономического развития каждой отдельной страны. Характерной чертой современного экономического развития подавляющего числа стран мира является быстрый рост внешнеэкономических связей, причем этот рост опережает темпы роста валового национального продукта стран, участвующих в мировой торговле. Основными элементами международных торговых связей являются экспорт и импорт. Различают экспорт товаров, услуг, рабочей силы, капиталов, технологий. Зарабатывая валюту, экспортер получает возможность приобретать нужные ему товары за рубежами страны. Импорт позволяет приобретать товары, не производящиеся в стране, либо те, приобретение которых более выгодно, чем производство в своей стране. Сумма экспорта и импорта составляет внешнеторговый оборот, или товарооборот страны. Различают активный (положитель-ный) товарооборот, когда экспорт больше импорта, и пассивный (отрицательный) товарооборот, когда экспорт меньше импорта.
Topics for the Power Point presentations:
2* Scanning means reading very quickly in order to find key factors or figures that are contained within a text.
3** чтобы усилить доводы
4* не займет много времени
5* Hermes [′ha;miz ]
6* Incoterms - short for “International Commercial Terms” – identify the additional costs, over and above the cost of goods, that the seller will invoice the buyer in international sales contract. They define who is responsible for arranging and paying for transportation, documentation, customs clearance and transport insurance.
7* Вот уж не знаю.
8** Сдаюсь.
9***Давайте на этом остановимся.
10* albeit = "all though it be (that)" - хотя (и). He was considered as a tough albeit fair boss. — Его считали жестким, хотя и справедливым, боссом. Syn: even though , even if , although
11 Нетто-кредитор
12 Попытка принять желаемое за действительное.
13 – Хорошо смеется тот, кто смеется последним.
14 – Кто начнет?
15 – По общему мнению … .
16 – Давайте пойдем дальше … .
17 – Можно мне высказаться?
18 Это не совсем срабатывает.
19 Шутить или играть с огнем.
20* вводное слово/предложение; парентеза
21 принуждение, насилие