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

duty n – 1) податок; 2) мито; to levy/to impose a duty – накласти податок

e.g. Customs duties are payments demanded by the government on certain goods exported or imported.

custom n – 1) звичка, традиція; 2) pl. митниця; customs duty – мито; customs officer – митник

e.g. The term “customs duties” comes from the money payments customarily paid on goods leaving or entering the country.

tariff n – тариф; protective tariff – захисний тариф; revenue tariff – прибутковий тариф; compound tariff – складний тариф; double-column tariff – подвійний тариф; single-column tariff – єдиний тариф

e.g. The tariff policy of a country aims to protect its home economy.

raw materials – сировина

e.g. The imports of certain raw materials are essential for our economy.

shield v – захищати

competition n – конкуренція

competitor/rival n – конкурент

e.g. Protective tariffs shield domestic production from foreign competition.

rate n – 1) норма; 2) ставка; tariff rate – тарифна ставка; preferential rate – преференційна, пільгова ставка; 3) exchange rate – обмінний курс; 4) відношення, пропорція

e.g. When different rates are used, a double-column tariff is applied.

2. Read and translate the text:

Customs

The practice of levying duties on goods entering or leaving the country originated in the Middle Ages when the king or monarch began to charge both export and import duties on goods, taking a part of the goods as payment. Later, money payments determined usually by the amount customarily paid were also accepted. This is where the term customs comes from.

The tariff policy of a country usually protects the interests of the home economy by enabling its products to penetrate foreign markets while protecting its own markets from being flooded by foreign goods.

Import tariffs are therefore kept as high as possible (except for raw materials and other goods, the imports of which are essential to the economy) and exports tariffs very low, if applicable at all.

Besides import and export duties, there are transit duties. A transit duty is a tax levied on goods passing through a customs area.

Tariffs are often classified as either protective or revenue. Protective tariffs are designed to shield domestic production from foreign competition by raising the price of the imported goods. Revenue tariffs are designed to obtain revenue for the government.

If tariffs are imposed according to the weight of goods or according to their quantity (so much per ton, per item, per metre, etc.), they are called specific tariffs. If they are levied according to the estimated value of the goods, they are known as ad valorem tariffs. A combination of these two is the compound tariff.

The customs tariff of a country is either a double-column tariff or a single-column tariff. A single-column tariff is used when the rates are valid in general for all countries. When different rates are used (preferential rates for certain countries, for example), a double-column tariff is applied.

3. Answer the following questions:

1. When did the customs originate?

2. What was originally taken as payment?

3. Where does the term “customs” come from?

4. What interests does the tariff policy of a country protect?

5. In what ways are the interests of the home economy protected by the tariff policy?

6. What main types of tariffs do you know? What is the essence of each of them?

7. In what case do they apply a single-column tariff? a double column tariff?

4. Give Ukrainian equivalents of the following:

the practice of levying duties; to charge both export and import duties; to penetrate foreign markets; to keep as high as possible; if applicable at all; to shield domestic production; so much per ton; to be valid for all countries.

5. Give English equivalents of the following:

брати частину товарів як оплату; сума, що сплачувалась традиційно; захищати власні ринки від насичення іноземними товарами; піднімати ціни на імпортовані товари; визначена вартість товарів; засто­совувати тариф.

6. Match the definition on the right with the word on the left. Translate and learn the definitions:

   levy	a) department of government that collects duties on goods imported into a country
   valid	b) to impose, to collect by authority or force
   customs	c) list of taxes on goods imported (less often) exported
   tariff	d) legal, real, acceptable; having force in law

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

weight, customs area, tariffs, value, quantity, foreign competition

1. … are classified as either protective or revenue.

2. Transit duty is paid on goods passing through a ….

3. To protect home economy from … import tariffs are kept very high.

4. Ad valorem tariffs are levied according to the estimated … of the goods.

5. Specific tariffs are imposed according to the … or the … of the goods.

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

   1) to protect	a) usually
   2) to levy	b) to design
   3) to apply	c) to shield
   4) to create	d) income
   5) revenue	e) to use
   6) price	f) to impose
   7) customarily	g) value

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

   1) foreign	a) leave
   2) valid	b) general
   3) enter	c) low
   4) high	d) domestic
   5) specific	e) destroy
   6) design	f) invalid

10. Translate into English:

1. Практика збору податків на товари, що ввозились та вивозились з країни, виникла в Середні Віки.

2. Тарифна політика країни захищає інтереси її внутрішньої еконо­міки.

3. Імпортні тарифи на сировину, необхідну для економіки країни, не дуже високі.

4. Тарифи, що захищають національного виробника від зовнішньої конкуренції називаються захисними.

5. За допомогою прибуткових тарифів країна отримує прибуток для уряду.

6. Якщо тарифні ставки юридично дійсні для всіх країн, застосову­ється єдиний тариф.

11. Topics for discussion:

1. Customs in the early days of international trade.

2. The aim of the tariff policy.

3. Kinds of tariffs and their essence.

12. Skills practice:

Describing changes

The following verbs can be used to describe upward (↑) and downward (↓) movements in price, quantity and amount.

Intransitive verbs (do not have an object)	Transitive verbs (have an object)
↑ increase, rise, go up ↓ decrease, fall, drop, go down, decline	increase, raise decrease, reduce, drop

e.g. The population of the world is increasing.

The government has increased import taxes.

The corresponding nouns can also be used (mind the stress):

↑ an increase, a rise, a raise (AE=increase in salary) ↓ a decrease, a trough, a drop, a decline, a reduction

Assignment 1. Complete these sentences using a noun or verb from the boxes above. Use each word only once.

1. There are several competing companies entering the market and this has caused a 20% … in prices.

2. Last year was a good year for the company and our sales … considerably.

3. The price of coffee has …as a result of the bad weather conditions.

4. As a result of the recession, we have had to … the amount of money we spend on research and development.

5. The … in profits is the result of poor management.

6. The recent … in foreign investment has been good for the economy.

7. Economists predict that interest rates will … if consumer spending continues to slow down.

8. Because of high profits last year, the company has announced a salary … for all its employees.

Assignment 2. Complete these sentences with the correct form of the verbs raise or rise.

1. The Chancellor has just… the duty on petrol.

2. The sun … in the east and sets in the west.

3. Our share price has … recently.

4. She … an important question at the meeting yesterday.

5. Bank lending rates … by 0.5% last month.

6. Could I … a question?

Assignment 3. Here are some paper headlines. Are they good news or bad? Underline verbs that indicate a movement. Is it upwards or downwards? Can you think of verbs with the opposite meaning?

Pepsi Co sales jump. Plans to shrink Navy. Trade Deficit improves. Dollar weakens. Losses double at Big Blue. Pace of recovery gains momentum.

e.g .to double - to halve

Which of these verbs can you make into a noun?

e.g. to weaken→weakness

Unit Four

Foreign Exchange