Unit 1. Export and Import Strategy

Part II

1. Remember the words:

- participant - учасник

- transportation - транспортування

- insurer - страхувальник

- to utilize - використовувати

- least-cost supply - постачання за найнижчими розцінками

- production input - виробничі ресурси

- supplier - постачальник

- to diversify - діверсифувати

- dependence - залежність

- to avoid - уникнути

- shipment - відправка, перевезення

- delivery date - дата постачання

- bill of sale - купча

- guarantee of payment - гарантія платежу

- a letter of credit - акредитив

- insurance - страхування

- customs - митниця

- to clear - очищати (товар від мита)

- terms - умови

2. Read and translate the text:

The bulk of international economic transactions involve exports and imports. In the area of exports and imports there is a huge variety of participants, ranging from the exporter and importer all the way to transportation companies, insurers, and banks.

Exporting and importing is a type of international business open to any size of firm, whereas other types of international activity, such as foreign direct investment, tend to demand greater capital, management time and other company resources.

Exporting can be viewed as a means of foreign market entry. Exporting can be selected to achieve least-cost supply for the foreign market, or to reduce the risk of having all sales in one country, or to establish a base for further production.

Domestic firms can utilize exports both to absorb products that cannot be sold locally and to expand business in new markets.

Importing is an often neglected part of international trade strategy. Any firm may find that it can obtain production inputs from abroad more cheaply or when suppliers are not available locally. Also by using foreign suppliers a firm can diversify its suppliers and avoid dependence on local firms only.

A “typical” export-import transaction takes place as follows. First, the exporter would look for a foreign buyer for its products. When the exporter finds a buyer – the transaction can proceed. The two firms negotiate for terms, such as the price, the quantity to be delivered, the delivery date, and the payment date.

In addition to the payment documents (a letter of credit, a bill of sale), the transaction usually involves an insurance contract (to protect against losses from damage in shipping) and a contract with some transportation company to ship the goods from the exporter to customs in the importer’s country. The goods must be cleared by customs inspectors in the receiving country, after which the importer may pick them up.

3. Answer the following questions:

1. What do a lot of international economic transactions involve?

2. Why is exporting open to any size or kind of firm?

3. What is the purpose of exporting?

4. What is the aim of importing?

5. What would a typical export-import transaction start from?

6. What terms do the firms usually negotiate for?

7. What else does the transaction involve in addition to the payment documents?

8. What is the function of the customs in the export-import transactions?

1. Study the following definitions. Reproduce them from memory:

production inputs - the resources which are employed to allow production of

goods and services to take place;

a letter of credit - letter from a bank authorizing payment of a certain sum to a

person or company (usually in another country);

insurance - agreement that in return for regular small payments, a

company will pay compensation for loss, damage, injury;

customs - the branch of government and its workers who keep track of

the goods brought into a country;

shipment - the process of transportation of goods, esp. by ship;

delivery date - date in the contract when a commodity will be transported to

a purchaser;

bill of sale - document which the seller gives to the buyer to show that the

sale has taken place.

1. Find the following words and phrases in the text and translate them into Ukrainian:

Merchandise exports and imports; participants; foreign market entry;

to demand greater capital; least-cost supply; to utilize exports; an often neglected part of international trade strategy; production inputs; to avoid dependence; to look for a foreign buyer; to negotiate for terms; guarantee of payment; an insurance contract.

1. Find words in the text opposite in meaning to the following:

unavailable; independence; to enlarge; exit; highest-cost supply.

1. Match the words in column I with their synonyms in column II:

1. entry a) volume

2. to demand b) to neglect

3. bulk c) access

4. to ignore d) to require

5. merchandise e) means

6. resources f) goods

7. to obtain g) to decide

8. to determine h) to gain

9. terms i) injure or harm

10 damage j) condition

1. Make a proper selection:

1. participant

2. terms

3. to clear

4. to diversify

5. dependence

6. guarantee

7. supplier

8. insurer

a) the state of needing the help and support of others;

b) a promise, usually in writing, that something will be done;

c) to give variety to something;

d) to get permission to leave or enter a place;

e) a person who takes part in something;

f) conditions offered, demanded or accepted in an agreement;

g) a person or company agreeing to pay compensation in case of injury, loss, etc.

h) a person or firm supplying goods.

9. Write the appropriate word or phrase in the following spaces:

1. All the … in the debate had opportunity to speak.

2. The blockade prevented … of foreign food from reaching our shores.

3. The food is ready for ….

4. Lloyds has estimated that … will pay around billion dollars as a result of the accident.

5. Our baggage has … customs.

6. According to the … of the contract goods should be shipped in May.

7. This country is now a major international textile ….

8. This government’s on western economic aid is widely known.

9. All goods must be paid for before ….

10. Many car manufactures are … as rapidly as they can.

11. Solar energy is now being … to heat water in thousands of city homes.

12. They … paying tax on their profits.

13. I had to go through … when I came to this country.

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