Sanctions are a form of reaction to illegal actions of another party. There are sanctions against dumping, for example. Dumping means shipping large amounds of a product to another country at prices below the cost of production or below the selling price.
Sometimes the government can encourage or discourage imports and exports of goods. It imposes quotas on certain products. An export quota specifies how much of a product can a manufacturer ship out. An import quota allows you to import to certain limit. The quota may be absolute (we reach a certain amount and can ship no more) or the government can combine it with a special tariff on all units over that amount. For example, we had an import quota of 6,000 automobiles. We had bought 6,000 automobiles with a 6.5 % tariff by the end of the last year, and all others we bought with a 45 % tariff.
The government also imposes special taxes or duties on imported goods. These are tariffs. Tariffs discourage imports because they make foreign goods more expensive. There are revenue tariffs that generate tax revenues and protective tariffs that protect home manufacturers. The purpose of the revenue tariffs is to raise money, and therefore these tariffs are rather low. The protective tariffs are much higher. Слова и выражения:
absolute – абсолютный
cocaine – кокаин
discourage (from) – расхолаживать, отвращать ( от чего-либо ), препятствовать
drug – лекарство, наркотик
dumping – демпинг, демпинговая торговля
embargo – эмбарго
encourage – поощрять
file – представлять (план), подавать (документы)
generate – вырабатывать, создавать
heroin – героин
illegal – незаконный, нелегальный
impose (on) – налагать
insist (on) – настаивать ( на чем-либо )
military – военный
moral – моральный
native – местный (житель)
party – сторона ( в сделке, на переговорах )
prevent – предотвращать
prohibit – запрещать
quota – квота
reason – причина
regulations – ограничения, законы; регулирующие акты и действия
revenue – выручка, приход ( средств )
sanctions – санкции
sanitary – санитарный
specify – определять, специфицировать
subsidiary – филиал
tariff – тариф
unit – единица ( продукции )
various – разнообразные
weapons – оружие
home market – внутренний рынок
local partners – местные партнеры
top management – высшее руководство
controlling interest – контрольный пакет акций
on these grounds – на этих условиях, на этих основаниях
way out – выход
economic master plan – генеральный план развития экономики
ship out – вывозить
to a certain limit – до определенного предела
revenue tariff – фискальный тариф
protective tariff – протекционистский тариф
raise money – собирать средстваExercise 7
Answer the questions:
1. Why do governments impose various regulations on businesses in their countries?
2. What kind of regulations could those be?
3. What does a foreign company have to do if its plans are a part of the government economic master plan, and the local authorities change their economic policy?
4. What reasons can governments prohibit import or export for?
5. What reasons make governments prohibit import of animals?
6. What is sanctions?
7. What is dumping?
8. How does the absolute quota work?
9. What does a government impose tariffs on imported goods for?
10. What is the difference between the revenue tariff and the protective tariff?Helping Foreign Trade
There are some institutions and policies in the world that foster international trade. If these institutions did not exist, many companies would not at all be able to go inter – national. The U.S. government created the Export-Import Bank (Eximbank) in order to reduce unemployment in the country. Eximbank makes loans to U.S exporters and foreign buyers of U.S. imports if private financing is not available. A firm can also buy insurance from the Foreign Credit Insurance Association (FCIA) to cover political risk, such as expropriation and loss due to war. The exporter can also buy insurance coverage on credit sales to foreign customer.
More known are the International Bank for Reconstruction and Development (World Bank) and the International Monetary Fund (IMF). The former fosters the economic development of member nations by making loans to them. The latter eliminates trade barriers and promotes financial cooperation among member countries. Thus, if firms in Argentina wish to buy from American firms but Argentina lacks American dollars, Argentina can borrow USD from IMF. Then it pays the loan back.
The General Agreement on Tariffs and Trade (GATT) is an international agreement in which member countries agreed to try to reduce trade barriers. Since 1948 GATT has arranged several rounds of negotiations to cut tariffs on thousands of products and to remove many nontariff barriers to trade (Tokyo Round – 1975–1979, Geneva Round – 1983). The International Development Association (IDA) and the International Finance Corporation (IFC) make loans to private businesses if they cannot obtain funds from other sources.
Other means of helping foreign trade are Foreign Trade Zones (Free Trade Zones). Foreign Trade Zones (FTZs) are areas in the country that are treated as foreign territory. Foreign goods can be imported into these areas without payment of duties imposed by the national government. These goods can then be sold and shipped from the FTZ to other countries duty-free. When these goods are shipped into the country to which FTZ belongs, the duty is imposed.
The advantage of FTZ is that it provides jobs for native workers and markets for goods produced in the country. There are now ninety seven such zones in the USA, for example. They are doing more than $ 7 billion of business and create more than 30 thousand jobs. The most well-known are the Brooklyn Navy Yard (New York), Del Rio (Texas), Port Everglades (Florida), etc. In the Brooklyn Navy Yard over 150 firms do business. Many U.S. workers there repackage goods for shipment to foreign markets. In other cases companies use an FTZ to delay customs duties on goods that are not yet ready for market. For example, a wine company in the New Orleans FTZ is aging its wine for future distribution.
Слова и выражения:
age – возраст; выдерживать ( о вине )
area – зона, область
borrow – занимать, брать ссуду
cover – покрывать
coverage – покрытие
delay – откладывать, отлагать
distribution – распределение, торговля
eliminate – уничтожать, ликвидировать
expropriation – экспроприация
former – первый ( из перечисленных )
foster – поощрять, благоприятствовать
institution – организация
insurance – страхование, страховка
lack – недостаток; иметь недостаток
loan – заем, ссуда; давать ссуду, заем
loss – потери
nontariff – не связанный с тарифами
promote – продвигать, поощрять
repackage – переупаковывать
treat – обращаться ( с кем-либо как-либо )
wine – вино
political risk – риск, связанный с политической нестабильностью
due to – из-за, благодаря ( чему-либо )
insurance coverage – страховое покрытие
credit sales – торговля в кредит
member nations – страны-участники
trade barrier – торговый барьер
USD – индекс доллара ( валюты )
pay back – возмeщать, выплачивать ( ссуду, заем )
round of negotiations – раунд переговоров
duty-free – беспошлинный
customs duties – таможенные пошлины
Export-Import Bank (Eximbank) – Экспортно-импортный банк
Foreign Credit Insurance Association (FCIA) – Ассоциация по страхованию заграничного кредитования
International Bank for Reconstruction and Development (World Bank) – Международный банк реконструкции и развития
International Monetary Fund (IMF) – Международный валютный фонд
General Agreement on Tariffs and Trade (GATT) – Генеральное соглашение о тарифах и торговле
International Development Association (IDA) – Международная ассоциация развития
International Finance Corporation (IFC) – Международная финансовая корпорация
Foreign Trade Zone – зона свободной торговли
Tokyo – Токио
Geneva – Женева
New Orleans – Новый ОрлеанExercise 8
Answer the questions:
1. Why did the US government create the Eximbank?
2. In what cases does the Eximbank make loans?
3. Where do firms buy insurance to cover political risks?
4. What role does the World Bank play in the world\'s economic system?
5. How does IMF operate on the world market?
6. What is the purpose of GATT?
7. What is a FTZ, and how does it work?
8. What is the main advantage of a FTZ?
9. How many FTZs are there in the USA?
10. What do the workers do at the Brooklyn Navy Yard?5. Как работает фондовая биржа (How to Make Money in the Stock Market)
Securities Markets
Securities are bought and sold at two types of securities markets: primary markets, which issue new securities, and secondary markets, where previously issued securities are rebought and resold. If a company wants to sell a new issue of stock or bonds, it usually negotiates with an investment bank, or underwriter, who sells the securities for it. The underwriter buys the securities from the corporation and resells them to individual investors through the secondary markets.