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Файл:English of Global Economics. Учебное пособие
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intervention. Furthermore, the implementation of a f lexible policy
on intellectual property in relation to medicines to treat AIDS
enables countries and companies to deal with this tragic epidemic
by encouraging low-cost access to critical medicines.
Open markets will engender economic recovery in the short
term and sustainable economic growth over time. A signal that
the world’s trading nations are committed to open markets (and
that they will resist protectionism) would inject much-needed
confidence into financial markets. By seeking to promote open
markets on multiple fronts — globally, regionally and with
individual countries — the world hopes to create a competition
in liberalisation that counters the political gravity of protectionism.
Additional trade liberalisation will also enhance productivity and
efficiency, while helping to keep inflation in check.
Trade liberalisation will benefit families around the world.
Thus, in America, the market openings implemented as part of
the Uruguay round and the North American Free Trade Agreement
generate annual benefits of $1,300—$2,000 for the average family
of four. The numbers may differ in other nations, but it is clear
that opening markets can deliver hefty tax cuts for families.
And the biggest beneficiaries are those with lower incomes,
as they are least able to afford higher prices for food or clothes
or appliances.
At the dawn of this new century we have a choice of ideas.
We must champion the ideas that lead to opportunity and growth.
With the prospect of freer trade ahead, we will be setting
a course for increased peace, and prosperity in the world for
decades to come
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.
Unit Three
to wither снижаться, идти на убыль; to swell (swelled, swollen) разрас
таться, увеличиваться; to engender порождать; poverty rates показатели
уровня бедности; to counter противостоять; gravity сила, тяжесть; hefty
изрядный, большой; beneficiary бенефициарий (тот, кто получает эко
номическую выгоду); to champion защищать, отстаивать.
Ex. 9. Read the text and prepare a general discussion of the following
problems: (a) the system of agricultural subsidies; (b) its impact
on developing countries; (c) development aid to poor countries;
(d) unlawful barriers to trade in African countries.
The United States and other developed countries f lood African
markets with cheap products subsidized by their taxpayers. But
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TRADE AND INVESTMENT
many analysts think that for developing countries to build their
economic potential it is necessary that industrialized countries
should eliminate trade-distorting subsidies and tariffs.
According to a 2002 survey nearly 40 percent of Americans
polled say the most effective way to fight world poverty is either
to help farmers in poor countries to produce more food, or to
promote more open markets and economic development in poor
countries.
Yet the industrialized countries continue to protect their
agriculture by paying some farmers more than $300 billion in
subsidies annually — six times what they give in development
aid. Because these payments encourage farmers to produce more,
world agricultural markets are glutted with subsidized crops like
corn, cotton, sugar and wheat, ultimately leading to lower prices
for all farmers.
The current U.S. farm policy enables it to export certain
commodities at prices well below production cost; corn, for
example, is priced at 20 percent below its production cost. Though
many developing countries have the advantage of cheap land
and labour, their farmers cannot compete with these subsidized
prices. Unable to sell their products even in national and local
markets, poor farmers and rural communities are condemned to
a cycle of poverty and hunger.
The current system of agricultural subsidies is not the best
way to deal with poverty and economic decline in rural America
either. Less than half of U.S. farmers receive subsidies. Economically
stressed communities in rural areas would be better served through
economic development initiatives, business promotion, job training,
infrastructure development and direct assistance to poor families.
Subsidies have been in place for generations and some farmers
would need time and help to adjust without them. But a better
path must be found that supports America’s rural economies and
provides U.S. farmers with feasible options without distorting global
markets.
Not long ago the U.S. administration took a significant step
forward in the fight against global poverty and hunger by
proposing to increase development aid by $5 billion annually for
poor countries that demonstrate their ability to use the money
well. Funding would be channeled through a special account
with the money increasing to the new level up to 2006. But poor
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countries also need access to the United States and other developed
country markets for their agricultural products.
New researches released in Agriculture in the Global Economy
indicate that the elimination of subsidies and protection in
industrialized countries would allow developing countries to
triple their annual net agricultural trade (export minus imports),
from $20 billion to $60 billion. That is about two-thirds the value
of all development and humanitarian aid provided by industrialized
countries. Getting European countries to liberalize agriculture is
especially important to developing countries. In fact, liberalizing
agriculture is in the interest of rich and poor alike. The estimated
gains to all countries from the elimination of trade-distorting
subsidies and tariffs in developed countries would be $100 billion,
according to the International Monetary Fund. Most of the gain
would go to consumers in industrialized countries themselves.
Reducing world poverty would increase demand for agricultural
products. As East Asia reduced poverty and hunger in recent
decades, it became a dynamic market for agricultural exports. Of
course, trade alone cannot solve many complex problems facing
poorer countries.
***
Unit Three
The usual way for poor countries to get rich is by exporting.
African goods sold in OECD countries (rich industrialized ones)
face tariffs roughly ten times higher than those levied on goods
traded within the OECD. Barriers are steepest in areas where
Africa, with its vast amount of land and relatively cheap workers,
has a comparative advantage, namely agriculture and textiles.
Rich countries’ subsidies to their farmers make up $320 billion a
year, a sum not far short of Africa’s annual GDP. Combined
with high tariffs and small quotas for some farm products, this
makes it dauntingly hard for African farmers to export to rich
countries.
Trade barriers within Africa have come down; the average
tariff is now 16%, compared with about 30% in 1990. But African
countries that have cut tariffs have erected other barriers, such
as discriminatory taxes on imported products, that provide nearly
the same degree of protection.
And not all trade barriers are of the legal sort. Bad roads and
obstructive officials hinder trade at least as much. A Cameroonian
beer truck took four days to cover 500 km, not least because it
TRADE AND INVESTMENT
had to stop 47 times for bribe-hungry policemen at road blocks.
And that was without crossing any borders.
There is one group of investors that is showing considerable
interest in Africa. With sanctions gone, South Africa firms now
invest more in the rest of Africa than companies from anywhere
else: about $1 billion a year since 1994, in everything from
mobile telephones to supermarkets. Why are they doing it? Partly
because African assets are cheaper than European ones; but also
because they see opportunities, and because they think they know
how to do business in Africa
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103
to glut перенасыщать, затоваривать (рынок); production cost себестои
мость; to distort деформировать (рынок); to triple [tripl] утраивать;
to levy tariffs облагать пошлиной, вводить тарифы; OECD (the Organi
zation for Economic Cooperation and Development) ОЭСР (Организация
экономического сотрудничества и развития, ООH); obstructive препят
ствующий, мешающий; dauntingly чрезвычайно.
Ex. 10. Read the following text and try to analyse why there exist
so many diff iculties in converging prices across the European
Union.
The European Union’s internal frontier-free market was officially
“completed” in 1992. Trade barriers did indeed come down. But
a decade on, the EU market is still far from seamless. Now, some
hope, the euro will finish the job: a single currency for a truly
single market. Will it?
The fragmentation of the EU marketplace is ref lected in its
prices. Survey after survey shows that prices can vary hugely across
the EU. One study of 53 products in the euro area revealed an
average price differential of 24%. A poll of European marketing
directors showed an average variation of 80% between companies’
highest and lowest price points. In Portugal, normally one of
Europe’s cheapest countries, researchers found the price of salt
to be 12 times higher than in Italy.
The euro is meant to change this. When euro-cash arrived in
2002, price comparisons were expected to become thoroughly
transparent, at least in the 12 euro-zone countries. From Athens
to Dublin, fussy consumers would be able to shop around for
the best bargains far more easily. Market pressures — helped
where necessary by governmental regulators — would make prices
converge. Or so the theory goes.
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The reality is more complicated. Yes, the euro removes one
difficulty in cross-country comparisons. But plenty of others
remain. When the Economist Intelligence Unit was asked recently
to select some identical branded consumer goods available in
several countries, so that prices could be compared, this proved
surprisingly tricky. For many products, purely local brands dominate:
a pan-European ò-shirt, for example, barely exists. Even where
trans-national brands can be identified, comparing like with like
across countries is extraordinarily complicated.
One problem is that manufacturers change product specifications
from country to country. Bicycles with the same model number
use different components. The “same” Adidas trainer may turn
out to be a slightly different version, with subtle alterations of
tread, shape or composition. Panasonic says each of its microwave
models is manufactured to a different specification for different
countries, making comparisons between their prices all but
impossible.
For many products, the sheer variety of models complicates
comparisons. Take the humble fishing reel. A single manufacturer,
Abu-Garcia, makes 53 models of just one type of reel. Since local
preferences and conditions abound in Europe, strict product
standardization is often ruled out. Southern Europeans tend to
have narrower feet than northerners, so shoes have to be tailored
accordingly. Spaniards are used to washing machines with lower
spin speeds than elsewhere in Europe. Germans like built-in
fridge-freezers, whereas Britons prefer free-standing models with
the freezer at the bottom (and the French like free-standers with
the freezer at the top). And so on, from kettles to cookers.
Suppose you manage to find some really comparable products:
a certain compact disk, say, or a particular golf ball. Two things
can still frustrate straightforward price comparisons. First, the
packaging may differ. How many golf balls are sold per pack?
Does the CD include a “bonus track” (the sort that can add 50%
to the price in Britain)? Second, the distribution channels can
change the picture. In France, for example, the main channel for
sales of audio products, televisions and videos is hypermarkets,
whereas in Germany sales are mainly through specialist stores;
although they are costlier, Germans often prefer these shops
because of their quality of service. If all this was not complicated
enough, there are still many other fiddly factors that inf luence
prices: different seasons between north and south, different tax
Unit Three
TRADE AND INVESTMENT
rates, the timing of sales and stock-clearance, the distance from
manufacturer to retailer.
The euro helps but just a bit. The prices of some products —
simple things like petrol and milk, or fairly standardized trans-national
goods like IKEA furniture, Zara clothes, Big Macs and, of course,
the Economist — will be easy to compare across the euro zone,
and should converge toward a European standard. But these will
be the exceptions. Producers will still have a whole arsenal of
ways of making distinctions, and keeping price differences, between
countries. Europeanization, let alone globalization, has a long
7
waytogoyet
far from seamless не так вс¸ гладко; a bargain выгодная покупка;
government regulators органы правительства; an Intelligence Unit отдел
информации; tricky сложный, запутанный; subtle alterations едва раз
личимые изменения; fishing reel катушка для намотки лески; spin speed
скорость вращения (барабана стиральной машины); a fiddly factor ничтожный фактор; stock-clearance распродажа.
Ex. 11. Read the following text and discuss: (a) various ways of getting
goods — online and offline; (b) the way your friends prefer to buy
presents; (c) most famous online and off line retailers in the world,
if you know; (d) advantages and disadvantages of selling and
purchasing goods online; (e) competition in this sector of economy.
.
105
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It’s a new phenomenon called “Cyber Monday”. On November
28th millions of Americans returned to work after the Thanksgiving
holiday and fired up their office computers to take advantage of
high-speed internet links and continue the arduous task of hunting
for Christmas presents. Visits to some retail websites more than
doubled and Visa reported that online spending by its card-holders
grew by 26% compared with the same day a year ago.
Despite concerns about a fall in consumer confidence putting
the brake on store sales, online purchases are soaring in most
countries. But something else is happening, too. Increasingly, the
websites run by conventional retailers, are growing the fastest.
Indeed, on Thanksgiving day itself, the number of visitors to
Wal-Mart’s website exceeded those visiting Amazon — the first
time that has ever happened.
Online sales in America (excluding travel) are expected to
grow to more than $19 billion in the crucial two months running
up to Christmas — 24% more than the same period last year.
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Online sales of toys, computer games, clothing and jewelry are
all more than 30% higher.
In many countries the websites run by eBay and Amazon
get the most visitors. Both are considered “pure internet plays”,
since they have no physical shops. But their business models have
changed markedly and they now resemble online versions of vast
department stores, where thousands of big and small merchants
also offer their wares.
Amazon was the company that proved online retailing could be
a huge business — and it still leads the pack. But things are
changing quickly. The rise online of mighty Wal-Mart, the world’s
biggest retailer, is being closely followed by its chief supermarket
rival, Target, which now operates the fourth-most-popular retail
website in America. In Britain, Argos, a catalogue merchant, is
the third-most-popular retail site, followed by Tesco, the country’s
biggest supermarket chain.
Europeans are surfing the web in record numbers and almost
half now visit retail websites, especially those of traditional
merchants. The leading retail websites in Europe include Germany’s
Tchibo, a diversified chain; OTTO, a German mail-order specialist;
and Fnac, a French high-street favourite.
Far from wrecking retailers’ businesses, the web plays to their
strengths. Shopping-comparison sites are among the fastest-growing
destinations on the web. These sites allow users to compare
products, read reviews — and most important of all — see who
is offering the lowest prices. They make money from advertising
or charging retailers when users click on a link to the retailers’
website.
With huge economies of scale it is hardly surprising that
giants such as Wal-Mart often emerge as the vendor offering
the cheapest prices. Besides attracting an online purchase,
shopping-comparison searches can also be used by ordinary retailers
as a relatively cheap way to advertise and attract consumers to
their physical stores.
The traditional retailers are finding many other advantages
in expanding their stores online. One is that in cyberspace, even
the biggest supercentre is unconstrained by planning laws or
dogged by protests, as Wal-Mart often is when it tries to expand
off line. Both Wal-Mart and Target also use the web to test
the market for certain products before they send them to their
stores.
Unit Three
TRADE AND INVESTMENT
Conventional shopkeepers might be late coming to the internet,
but they now realize that they can offer more to their customers
online, and that the technology required to do so is relatively
easy to use. Retailers are starting to recognize that their most
profitable customers find the convenience of an online offering
complementary to an in-store experience. As examples of successful
exponents of this in America are Nieman Marcus, which has taken
a lead in online top-end fashion and Circuit City in consumer
electronics.
Circuit City was a pioneer of the “pick-up in-store” option,
which is proving increasingly popular with internet shoppers.
Around half the consumers buying goods online from Circuit
City collect their purchases at a shop. For this holiday season the
company is offering what it calls a “24/24 Pick-up Guarantee”:
if goods ordered online or over the telephone are not available
for collection at a local store within 24 minutes of purchase, the
customer can claim a $24 gift voucher.
Apart from instant consumer gratification why would someone
want the convenience of buying online only to trek to a store to
take delivery? There are, it appears, many reasons. Some people
want to examine items before they accept them; some want to
save on delivery costs; others want to avoid hanging around for
the delivery man to call. But for many, the chief reason is that
they trust a big retailing brand with a local store — not least
because they will know where goods can be returned if there is
a problem.
Does this mean retailing giants will come to dominate the
web just as they do the high street? Some might carve out large
chunks of cyberspace. Tesco, for instance, has a huge 30% share
of the British grocery market. Online it is even more popular:
almost 70% of online shoppers plan to buy groceries this Christmas
from tesco.com.
But even the big traditional retailers still face competition
online. For instance, Wal-Mart may have more than five times
the annual sales of Target, but Target’s website is growing faster
and, according to some analysts, the average value of an online
sale at Target is roughly three times more than one made online
at Wal-Mart. This is one reason why Wal-Mart is now offering
more upmarket goods on its website, including diamond rings.
Amazon is also expanding its activities, offering “earth’s biggest
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selection”, and selling its e-commerce experience, helping to run
the websites of big, traditional retailers such as Target and
Britain’s Marks & Spencer
8
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Unit Three
cybernetics [/saibə!netiks] кибернетика; “Cyber Monday” «кибер-поне
дельник»; an arduous task изнурительный труд; card-holder держатель
карты; to put the brake (on) затормозить, замедлить; online sales прода
жи через Интернет; catalogue merchant фирма, торгующая по каталогу;
a supermarket chain cеть супермаркетов; to surf çä. просматривать; high
street главная улица; destination направление, цель; economies of scale
экономия, обусловленная ростом масштаба производства; vendor тор
говец вразнос; cyberspace [!saib
ческое пространство); to constrain вынуждать, стеснять; to dog пресле
довать, не давать покоя; conventional обычный, традиционный; top-end
дорогостоящий; a gift voucher талон на подарок; gratification вознаграж
дение; delivery 1. доставка 2. доставленный товар; chunk кусок, доля;
the average value of an online sale общая (cредняя) стоимость продаж
через Интернет; upmarket goods предметы роскоши.
əspeis] киберпространство (кибернети
Ex. 12. Read the text and (a) describe the world we live in;
(b) explain the unprecedented growth of markets; (c) answer what
is good about precarious and real-time pricing.
This is the age of more. More choice. More consumption.
More uncertainty. More competition. More opportunities. We have
entered a world of excess: an age of abundance.
The Mall of America in Minneapolis attracts 40 million visitors
a year — more people than Disney World, Disneyland and the
Grand Canyon combined. Shop till you drop. In Norway —
population 4.5 million — you can choose from 200 different
newspapers, 100 weekly magazines, and some 20 TV channels.
In Sweden — population 9 million — the number of beers to
choose from has increased from around 50 to over 350 in little
more than 10 years. The year of 1996 saw the publication of
1778 business books in the American market. In the same country,
the number of grocery product launches increased from 2700
in 1981 to some 20,000 in 1996. To keep up with all the product
launches, Procter and Gamble has more scientists on its payroll
than Harvard and Berkley combined. Seiko turns out more than
5000 separate watch models. In 1996, Sony launched new
products — more than 2 new products per working hour. Maybe
this is necessary in a market where the average product lifecycle
for consumer electronics products is now three months.
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TRADE AND INVESTMENT
The first element in creating this world of excess is the growth
in markets. There are more markets for more things, covering
a larger geographical area than ever before. Deregulation and
trade liberalization have unleashed market forces on virtually
every human activity. At the turn of the 20th century, some
10—15 percent of the world population lived within a market
system. In the 1970s, approximately 40 percent of all individuals
lived within such a system. Today we are talking about 90 percent.
But not all markets are global yet. Take labour markets. Only
1.5 percent of the workforce works outside its home country.
In the European Union, the equivalent number is 2 percent. Capital
still f lows more freely than people.
Still, in this crazy world there are markets for absolutely
everything. Markets in commodities and capital; body parts; any
industrial component you can think of; any kind of service you
can imagine. There are markets in alcohol — a Dutch nightclub
entrepreneur operates a futures market in drinks at his clubs;
and markets in knowledge and talent.
After World War II, demand mostly exceeded supply. There was
a great surge for new jobs, products and services. The European
and Asian industrial infrastructures were in ruins. This was great
news for any company in any industry. We were at their mercy —
as employees and consumers. Moreover, the rate of technological
change and proliferation of customer preferences was not as great
as it now is. Things moved slowly and usually moved locally. This
was the world of mass production where markets were assumed
and taken for granted; where customers were told what they
wanted — any colour so long as it was black.
In the slow-growth 1990s, however, supply is beginning to
exceed demand in market after market. Overcapacity is the norm
in most businesses. Both technical progress and customer needs
are driving toward smaller lot sizes and higher variety.
Old local companies can, and do, now compete all over the
world. New companies can, and do, now enter traditional industries.
As firms no longer need to make everything that they plan
to sell — they can buy it from someone else — entry barriers
are evaporating. Totally new entrants, or firms that historically
competed in other industries, can combine components from
other companies. They do not need huge amounts of capital or
specialist knowledge. Invisible invaders can attack conventional
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