Transcript Document

Import export
International trade is the exchange of goods
and services between different countries.
 Depending on what a country produces and
needs, it can export (send goods to another
country) and import (bring in goods from
another country)
 In most countries import export represents a
significant share of GDP
 Governments can control international trade.
The most common measures are tariffs (or
duties) and quotas.
 A tariff is a tax on imported goods, and a quota
is the maximum quantity of a product allowed
into a country during a certain period of time.
These measures are protectionist as
they raise the price of imported goods to
protect domestically produced goods.
International organisations such as the
WTO (World Trade Organisation) and
EFTA (European Free Trade Association)
regulate tariffs and reduce trade
restrictions between member countries.
Companies have a choice:
 They can choose from various methods to
establish their products in a foreign market.
 One option is to start by working with local
experts such as sole agents or multidistributors, who have a specialist knowledge
of the market and sell on behalf of the company.
 This often leads to the company opening a local
branch or sales office.
 Another option is to sell, or give permission to use,
patents and licences for their products.
 They may wish to start by manufacturing in the export
market, in which case they can either set up a local
subsidiary or a joint venture with a local partner.
 A country’s balance of trade is the difference between
the values of its imports and exports. This includes
visible imports / exports (goods) and invisible
imports / exports (services). If a country imports more
than it exports, it has a trade deficit. If it exports more
than it imports, it has a trade surplus.
How does international trade work?
 Rich countries produce goods and want to sell
them at a profit. To protect their profits, they
place high taxes on goods imported from other
countries (unless they have a special trade
agreement).
 Poor countries also produce goods and want to
sell them at a profit. However, in order to export
their goods to other countries they are forced to
pay high taxes before they can sell them. This
makes the price of their goods very expensive
and so they do not sell.
 Rich countries need raw materials to produce
their goods. Raw materials are cheap as they
are not a finished product that consumers will
want to buy. Many poor countries have the raw
materials that rich countries need. So, rich
countries buy these cheap raw materials and
turn them into expensive desirable products
such as clothes and sell these at a huge profit.
For example, shoes costing a few pounds to
make could be sold for 60 pounds in shops. The
producers of the raw materials would have only
seen a tiny percentage of this profit.
In poor countries the producers of raw
materials are forced to sell at low prices by
big companies. If their price is too high,
the companies will simply go elsewhere. If
producers want to sell their materials they
have to sell at a low price.
Why don’t poor countries place high taxes
on imports?
 The simple answer is that they’re not allowed.
Poor countries borrow money from international
organisations.
 Part of the deal on the loan is that they have to
allow rich countries to export their goods to
them-this is called “Free Trade”. It means that
trade takes place freely to give the consumer the
best deal.
 It all about money. Small scale farmers and
producers in poor countries simply can’t
compete.
Compound adjectives
Commonly confused words
Adjectives can be formed by combining two
words, for example long-term. Match these
words to get adjectives:
 Environmentally
 Old
 Short
 Low
 Well
 High
 User
 Fashioned
 Term
 Budget
 Known
 Friendly
 Level
 Trained
Complete these nouns with the correct
adjectives from the last exercise:
1)
2)
3)
4)
5)
6)
7)
8)
_______ ________ packaging
_______ ________ typewriter
_______ ________ opportunities
_______ ________ advertising
_______ ________ personality
_______ ________ decision-making
_______ ________ software
_______ ________ staff
Use the same adjectives to complete the
following sentences:
1) This is just a ________ investment. We have
other plans for the next year.
2) He is a _________ singer and now he is on
tour in the Third world countries.
3) Fortunately, yours is a _________ plan. Maybe
we’ll get the green light and get the money we
need.
4) It is a _________ management problem. Only
a few people will know all the details.
Commonly confused words: circle the
correct word in italics:
1)
2)
3)
4)
5)
6)
Importers and exporters are constantly in contact
seeking his advice/advise about the market.
This report examines the relationship/relation between
education and the level of development in Africa.
Car manufacturers are developing more
economic/economical engines and improved fuel
systems to make their vehicles more efficient.
Austria and Finland were excepted/accepted into the
European Union in 1995.
Of the two proposals put forward, I prefer the
later/latter.
Who’s/Whose responsible for consumer affairs in this
company?
7) I’ve added an appointment with Ms Diaz to you’re/your
agenda.
8) The poor weather this summer will certainly effect/affect
the grape harvest.
9) We attended a conference on the principles/principals of
strategic management.
10) Our personnel/personal are given intensive language
training before being assigned abroad.
11) The budget proposition/proposal was accepted
unanimously.
12) When you are working in a foreign country you should
conform to the business practises/practices of that
culture.