Voluntary export restraints. In recent years, international agreements have reduced the level of tariffs and restricted the use of quotas. Accordingly, countries have sought to protect themselves from the onslaught of foreign competition by other means. One that became popular in the 1980s was voluntary export restraints (VERs). Quotas and VERs are very clear examples of non-tariff barriers to trade. For example there are many different product standards and regulations in different countries. They are particularly important in markets for a successful trade.

Ex. 1. Give English equivalents to the following:

Торговля, торговец, продаёт за деньги, люди оказываются вовлечёнными, сберегательный счёт, быть более состоятельным, считать выгодным, самодостаточный, ограничения в торговле, торговать без ограничений, ограничивать ввоз товаров, тариф, квота, добровольные экспортные ограничения, бестарифные ограничения, обеспечивать справедливую торговлю без штрафа, внутренний продукт, находиться в худшем положении, масштаб иностранных поставок, в пользу иностранных производителей

Ex. 2. Give Russian equivalents to the following:

petrol and groceries; plumbing and styling; goods and services, economic relations, standard of living, commercial policies, domestic industry.

Ex.3. Answer the questions:

1.How do people trade?

2.Why do people and countries trade?

3.What is protectionism?

4.What is commercial policy?

5.What are four major categories of trade barriers? Think of some examples from mass media.

6.What is a tariff? How does it influence a domestic price?

7.What is a quota? What does a quota provide domestic producers with?

8.What is VER? Give examples.

Ex.4 Produce communicative situations, using the following expressions:

Trade barriers, protectionism, a tariff, domestic price, commercial policy

Read and translate the text 2.

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FOREIGN TRADE. MARKETS

A market is commonly thought of as a place where commodities are bought and sold. Thus fruit and vegetables are sold wholesale at Covent Garden Market and meat is sold wholesale at Smithfield Market. But there are markets for things other than commodities, in the usual sense. There are real estate markets, foreign exchange markets, labour markets, short-term capital markets, and so on; there may be a market for anything which has a price. And there may be no particular place to which dealings are confined. Buyers and sellers may be scattered over the whole world and instead of actually meeting together in a market-place they may deal with one another by telephone, telegram, cable or letter. Even if dealings are restricted to a particular place, the dealers may consist wholly or in part of agents acting on instructions from clients far away .

Thus agents buy meat at Smithfield on behalf of retail butchers all over England; and brokers on London Stock Exchange buy and sell securities on instructions from clients all over the world. We must define a market as any area over which buyers and sellers are in such close touch with one another, either directly or through dealers, that the prices obtainable in one part of the market affect the prices paid in other parts.

Modern means of communication are so rapid that a buyer can discover what price a seller is asking, and can accept it if he wishes, although he may be thousands of miles away. Thus the market for anything is, potentially, the whole world. But in fact things have, normally, only a local or national market.

This may be because nearly the whole demand is concentrated in one locality. These special local demands, however, are of quite minor importance. The main reason why many things have not a world market is that they are costly or difficult to transport.

The lower the value per ton of a good, the greater is the percentage addition made to its price by a fixed charge per tonmile for transport. Thus, if coal is £2 a ton and tin £200 a ton at the place of production, a given transport charge forms a percentage of the price of coal a hundred times greater than of the price of tin. Hence transport costs may restrict the market for goods with a low value per ton, even if, as is often the case, they are carried at relatively low rates. It may be cheaper to produce, say, coal or iron ore at A than at B, but the cost of transporting it from A to В may outweigh the difference in production costs, so that it is prodiced for local consumption at B, and В does not normally form part ot the market output of A. For example, coal is produced much more cheaply in the United States than in Europe, but, owing to the cost of transporting coal by rail from the inland mines to the Atlantic seaboard of the United States, American coal seldom finds its way to Europe.

Sea transport, however, is very much cheaper than land transport. Hence

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commodities can often be sent profitably quite long distances by sea. Thus Swedish iron ore comes by sea from Narvik to the Ruhr, and British coal is exported to Canada and South America.

The markets for real estate are local. Soil has been transported from French vineyards to California, and historic mansions have been demolished in Europe to be re-erected in the United States, but as a rule land and buildings are not transported.

Some goods, like new bread and fresh cream and strawberries, must be consumed very soon after they have been produced, and this restricts their sale to local markets. Other goods do not travel well. Thus many local wines which cannot stand transport can be bought in the district more cheaply than similar wines which have a wider market. The development of refrigeration, and of other devices which enable foodstuffs to be preserved and transported, has greatly widened the market for such things as meat and fish and some kinds of fruit. But such devices often transform the articles, from the standpoint of consumers, into a different commodity. Condensed milk is not the same as fresh milk, and chilled meat or frozen butter has not the same taste as fresh.

Many workers are reluctant to move to a different country, or even to a different part of their own country, to get a higher wage. This should not be exaggerated. Before the war of 1914, over a million persons a year emigrated overseas from Europe. Following it, there were considerable movements of population within Great Britain away from the depressed areas towards the more prosperous South. Employers may take the initiative. Thus girl textile workers have been engaged in Yorkshire to work in Australia, and during the inter-war years French employers engaged groups of Poles and Italians to work in the coal-mines and steel-works of France. Nevertheless labour markets are mainly local, or at any rate national.

Answer the following questions:

1.What notions does the term "market" imply?

2.How does it happen that the market for anything is the whole world?

3.What is the role of the cost of transporting in price building?

4.What are the markets for real eatate?

5.What is meant by labour markets?

IMPORT-EXPORT

THE TWO ASPECTS OF FOREIGN TRADE

Importing and exporting are the two aspects of foreign trade: a country spends money on goods it imports and gains money through its exports. Valuable though foreign trade trade is for keeping domestic prices down by creating competition at

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home and providing large markets abroad, governments may have to put restrictions on it, which they usually do by subjecting imports to customs duties or by restricting some types of exports.

Customs authorities must make sure that imported goods are not sold at a lower price than that in their country of origin; to assess the domestic price they require consular invoices or certificates of vaalue and origin.

Large firms may have their own import and export departments, but both large and small firms deal with clearing and forwarding agents who handle all the details of transporting cargo.

When goods are sold abroad, buyers who are stockists will have to pay for stocks for which they will not receive payment for some time; they must, therefore, work on a higher profit margin to cover this. Many buyers prefer to become foreign agents who work on commision; they will not then have to pay for the goods but they must obtain the highest possible prices when the goods are sold.

So, after careful market research, a manufacturer can sell to a large export market if he has the right products, of the right quality, and sells them at the right price.

VISIBLE AND INVISIBLE IMPORTS AND EXPORTS

Goods, such as cloth and televisions, are visible (you can see them). Goods you sell abroad are visible exports. When you sell exports, money will come into your country. When you buy visible imports, money leave your country. Some imports and exports are invisible. For example, if an engineering expert from country A goes to Country В to help them improve their engineering industry, he will earn money from В and bring it back to A. The expert is providing a service ( which is his knowledge or expertise). For В this is an invisible import (because money leaves the country), but for A it is an invisible export (because money comes into the country).

If you take care of our imports, our exports will take care of themselves.

Tasks to the text:

Ex. 1. Read the text and guess its meaning.

Ex. 2. In groups, discuss the retail business in your country.

How has the business changed in recent years?

What do you think are the reason for these changes?

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