I. Read and learn the following words and word combinations. Translate the examples:

consume v – споживати

consumer n – споживач; ultimate/final consumer – кінцевий споживач consumerism n – захист споживача

consumption n – 1) споживання; 2) затрати; personal/private/individual/household consumption – особисте спожи­вання; public consumption – споживання для задоволення потреб насе­лення; social consumption – суспільне споживання; per capita consumption – споживання на душу населення; world consumption – світове споживання; yearly consumption – річне споживання

e.g. Per capita consumption has increased in recent years.

commodity n – 1) предмет споживання, товар; 2) продукт; consumer/consumable commodities – товари широкого вжитку; export/import commodities – експортні/імпортні товари; essential commodities – товари першої необхідності; commodity in short supply – дефіцитний товар; syn. goods

e.g. Our company trades in consumer commodities.

prohibit v – 1) забороняти; 2) заважати, перешкоджати; syn. to ban, to restrict, to veto; prohibited imports – товари, заборонені до ввезення

e.g. Embargo prohibits all trade with a particular country.

measure n – 1) міра, система мір; 2) критерій, мірило, масштаб; 3) за­хід, засіб; economy measures – економічні заходи; punitive measures – каральні заходи

e.g. The government used every measure to protect home producers of steel.

administrative red tape – адміністративні бюрократичні заходи

e.g. Administrative red tape is often used to restrict foreign trade.

regulation n – 1) регулювання; 2) правилa, інструкції, приписи, регла­мент; 3) постанова, розпорядження

e.g. All countries have regulations about standards for products.

abolish v – 1) відміняти; 2) знищувати; syn. to eliminate

e.g. Countries should abolish non-tariff restrictions on foreign trade.

goal n – 1) мета; 2) завдання; syn. aim, purpose, objective; primary goal – першочергова мета/завдання

e.g. The primary goal of GATT was to control restrictions on foreign trade.

dumping n – демпінг

e.g. Selling the same product for a lower price abroad than at home is called dumping

II. Read and translate the text:

Barriers to International Trade

Despite the many advantages of trade between nations trade barriers are often imposed on certain goods. You have already learned some general infor­mation about the means of controlling foreign trade (see Units 2-3). Here we shall dwell upon these issues in more details.

Two of the most important barriers to trade (import) are tariffs and quotas. A tariff is a duty, or tax, usually levied on imported goods. It is imposed to make imported goods more expensive compared to the domestic product. For this reason tariffs are usually very high and discourage the import of lower-priced foreign goods to the country.

Quotas are physical limits upon the amount of a good or a service, which can be imported or exported. Products limited by quotas may be subject to tariff as well. However quotas tend to increase prices even more than tariffs. Quotas are often used to restrict imports where tariffs seem to be not very effective because consumers are prepared to pay high prices for foreign commodities. Like protective tariffs quotas limit the amount of foreign competition a pro­tected home industry is likely to face. For example, a quota may state that not more than X automobiles may be imported from a definite country in one year, thus protecting home automobile industry.

A specific type of quota that prohibits all trade is known as an embargo. It is a complete ban upon trade with a particular country. Like quotas embargos may be imposed on either imports or exports. Embargo is usually imposed for political reasons but also has an economic effect. The USA has maintained embargo on Cuban goods since 1959, when Castro took power in Cuba. This embargo severely damaged Cuban sugar industry and caused nearly $86 billion losses for Cuban foreign trade in almost 50 years.

A boycott is a restriction against the purchase of goods from a particular country aimed at protecting domestic industries. Sometimes boycotts are used as a punitive measure to restrict both imports and exports between two countries

There are other devices that directly influence the flow of trade among nati­ons. One of these is the export subsidy – a payment by a country to its exporters that enables them to sell their products abroad at a lower price than they could sell them for at home. Selling the same product for a lower price abroad than at home is called dumping. Such policy allows the exporters to penetrate foreign markets and face the competition while all their expenses are compensated by the government subsidies.

Still another tactic to restrict foreign trade can be classified as “admini­strative red tape”. This is the use of governmental rules and regulations to make it difficult to import goods from abroad. All countries have regula­tions about standards for products. They are aimed to protect health, safety and product quality. Occasionally product standards can be deliberately designed to prevent imports.

Since the Second World War countries have attempted to abolish or at least to control restrictions on trade. One of the most important steps was signing the General Agreement on Tariffs and Trade in 1948. The primary goal of GATT was 1) to reduce protectionism that favours home producers over foreign produ­cers and 2) to eliminate discrimination favouring one foreign producer over another. According to the principles of GATT protection should only be given through tariffs while such non-tariff restrictions as import quotas or subsi­dies should be discouraged.

III. Answer the following questions:

1. How do import tariffs influence the price of goods?

2. In what case are quotas imposed?

3. What are the reasons for imposing an embargo?

4. What is the aim of a boycott?

5. How do subsidies influence foreign trade?

6. What is called dumping?

7. In what forms can administrative red tape be used?

8. With what purpose are product standards introduced?

9. What post-war event was the first step to control restrictions on foreign trade?

10. How should a country protect its home industry according to the principles of GATT?

IV. Give Ukrainian equivalents of the following:

trade barriers; to impose a barrier/duty/tax/tariff; physical limit; to be subject to tariff as well; foreign competition; it is likely to face; to deprive smb of smth; to penetrate foreign market; safety; to attempt; to favour one foreign producer over another.

V. Give English equivalents of the following:

всупереч; детальніше розглянути дані питання; більш дешеві зарубі­жні товари; імпортовані товари широкого вжитку; повна заборона торгі­влі; обмеження щодо купівлі товарів; безпосередньо впливати; дем­пінг; в той час як; навмисне; у відповідності до принципів.

VI. Match the definition on the right with the word on the left. Learn the definitions:

quota	money granted, especially by a government, to an industry needing to help or to keep prices down
embargo	smth used as a test or measure for qualities
boycott	a limited quantity of goods allowed to be manufactured, sold or bought
dumping	a refusal to buy or deal in certain products
subsidy	when firm or industry sells products on the world market at prices below the cost of production
standard	a specific type of quota that prohibits all trade

VII. Fill in the gaps with the words from the list below:

quotas, subsidies, trade barriers, steel tariffs, standards, embargo

1. … given to EU farmers ensure that farmers from outside EU cannot compete.

2. Imposing high product … the government wanted to protect consumers against low quality products.

3. At the end of March, OPEC, which pumps a third of the world’s oil, agreed to reduce production ….

4. … … imposed by the US president destroyed more jobs than they were expected to protect.

5. Even the critics of globalization understand that … … are the danger to free trade.

6. During the 1973 Arab oil … the Pentagon planned to invade and occupy oil fields in eastern Saudi Arabia.

VIII. Match the synonyms. Use any 5 words in the sentences of your own:

to restrict	to destroy
to ban	to confront
to allow	to enable
to damage	to limit
to face	to prohibit

IX. Match the words with the opposite meaning. Use any 5 in the sentences of your own:

to prohibit	incomplete
to encourage	non-tariff
complete	to discourage
likely	to allow
tariff	unlikely

X. Match the prefixes that give the words the opposite meaning with the groups of adjectives below. Translate the pairs of opposites. Add one or more adjectives to each group:

dis- il- -im -in ir- un- non-

	im	possible	probable	precise
	_______	honest	similar	organized
	_______	popular	economical	manageable
	_______	legible	legal	logical
	_______	complete	expensive	efficient
	_______	regular	relevant	responsible
	_______	freezing	existent	stop

XI. Complete the sentences with the words from ex. X that match the meaning of the underlined phrases:

1. I cannot read your letter. Your handwriting is ______.

2. They work without any breaks. They work ______.

3. This information has nothing to do with your topic. It is ______.

4. You haven’t mentioned all necessary facts. Your report is ______.

5. His car needs too much petrol. It is very ______.

6. She could afford flying to Kyiv. The ticket was ______.

7. Shock therapy had negative effect on the majority of their population. It was a very ______ measure.

XII. Translate into English:

1. Генеральна угода з тарифів і торгівлі сприяла створенню вільної тор­гівлі між націями.

2. Адміністративні заходи, спрямовані на захист споживача, повинні бути ретельно сплановані.

3. Застосування демпінгової політики руйнує позитивний імідж кра­їни.

4. З якими проблемами ви зіткнулись при підписанні цього контракту?

5. Бойкот та ембарго зазвичай застосовуються з політичних причин.

6. Щоб обмежити зовнішню конкуренцію, уряд вирішив підвищити тарифи на імпорт.

XIII. Topics for discussion:

1. Why do nations erect trade barriers? Give examples of how Ukrainian producers are protected.

2. Speak about non-tariff restrictions on foreign trade. Why should they be eliminated?

3. How are political punitive measures realized through trade relations?

4. Speak about the meaning of the terms “protectionism” and “discrimination”.

5. Explain examples of the application of the respective policies.

XIV. Skills practice:

Assignment 1. Study the commodity price index, published by “The Economist” on March 27, 2004.

			% change on
	March 16th	March 23rd	one month	one year
Dollar index all items	98.0	100.2	+3.7	+32.2
Euro index all items	104.4	107.1	+6.8	+14.9
1995=100

Describe the table.

Use the example as a model:

e.g. The Economist’s all-items dollar-based index dropped to 98.0 (based on 1995 as 100) on March 16^th and then increased to reach 100.2 on March 23^rd. Сommodity price index rose by 3,7% in the month and by 32.2% in the year to March 27, 2004.

Assignment 2. Using the table say: 1) how the dollar-based commodity prices changed in one week/ one month/ one year; 2) how the euro-based commodity prices changed in one week/ one month/ one year; 3) compare the trends for prices expressed in both currencies.

Unit Fourteen