Миловидов В.А. Английский разговорный язык. Практическое пособие по развитию устной речи
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Japanese style of industrial management –
Exercise 6
Answer the questions:
1. Where were the presidents heading when they were kidnapped?
2. Why did the terrorists decide to kill them?
3. What was the last request of the English corporate president?
4. What did the French ask as the last wish?
5. Why did the American prefer to die rather than listen to the Japanese president?
Regulations of International Business
Some governments impose various regulations on businesses in their countries. Sometimes
these regulations discourage foreign companies from entering home markets. In some countries
all international businesses must have local partners. In other countries a foreign firm must have
at least one native in the top management of a branch or a subsidiary. Some governments, for
example in Mexico, insist that the local partners have the controlling interest. However, big firms
like IBM refuse to do business on these grounds and usually manage to find the way out.
Government regulations limit what a company may do. For example, some countries demand
that the company should file a plan indicating what it is going to produce, how many local
workers it is going to hire and how much it will pay the workers. This plan must also fit into the
government economic master plan. If the country changes its master plan, the foreign firm must
change its plans, too.
Governments can prohibit the import or export of certain products for military, sanitary, moral or
political reasons. A military embargo prevents weapons going to a certain country. The United
States prohibit the import of certain birds and animals for sanitary reasons. Moral reasons are
the grounds for embargoing cocaine, heroin and other drugs. Sometimes governments prevent
the export for political reasons. For example, the United Nations set embargo on sales to, and
purchases from, Rhodesia before it became Zimbabwe.
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.
:
absolute –
cocaine –
discourage (from) – , (),
drug – ,
dumping – ,
embargo –
encourage –
file – (), ()
generate – ,
heroin –
illegal – ,
impose (on) –
insist (on) – ()
military –
moral –
native – ()
party – (, )
prevent –
prohibit –
quota –
reason –
regulations – , ;
revenue – , ()
sanctions –
sanitary –
specify – ,
subsidiary –
tariff –
unit – ()
various –
weapons –
home market –
local partners –
top management –
controlling interest –
on these grounds – ,
way out –
economic master plan –
ship out –
to a certain limit –
revenue tariff –
protective tariff –
raise money –
Exercise 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.
:
age – ; ()
area – ,
borrow – ,
cover –
coverage –
delay – ,
distribution – ,
eliminate – ,
expropriation –
former – ()
foster – ,
institution –
insurance – ,
lack – ;
loan – , ; ,
loss –
nontariff –
promote – ,
repackage –
treat – ()
wine –
political risk – ,
due to – , ()
insurance coverage –
credit sales –
member nations –
trade barrier –
USD – ()
pay back – , (, )
round of negotiations –
duty-free –
customs duties –
Export-Import Bank (Eximbank) –
Foreign Credit Insurance Association (FCIA) –
International Bank for Reconstruction and Development (World Bank) –
International Monetary Fund (IMF) –
General Agreement on Tariffs and Trade (GATT) –
International Development Association (IDA) –
International Finance Corporation (IFC) –
Foreign Trade Zone –
Tokyo –
Geneva –
New Orleans –
Exercise 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.
(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.
Organized security exchanges have developed to make the buying and selling of securities
easier. The securities exchanges consist of individual investors, brokers, and intermediaries
who deal in the purchase and sale of securities. Security exchanges do not sell or buy
securities, they simply provide the location and services for the brokers who buy and sell.
Stock transactions are handled by a stockbroker.
A stockbroker buys and sells securities for clients. Stockbrokers act on the clients' orders.
Stockbrokers receive a fee and are associated with a brokerage house. To trade on the
exchange, a «seat» must be purchased.
A seat is a membership. The members represent stockbrokers. When a stockbroker calls in an
order to sell, the member representing that broker looks for a buyer at the price requested.
When a broker calls in an order to buy, the exchange member looks for a buyer at the price
offered.
The largest and best known exchange in the USA is the New York Stock Exchange (NYSE),
also called «Big Board». There are more than 1,300 seats on the NYSE, and approximately
2,000 stocks and 3,500 bonds are traded daily. In order to be listed on the NYSE, a firm has to
meet the following requirements:
1. Pretax earnings of at least $2.5 million in the previous year.
2. Tangible assets of at least 16 million.
3. At least 1 million shares of stock publicly held, and others.
The second largest stock market in the USA is the American Stock Market Exchange (AMEX). It
is located in Manhattan and has about 500 full members and 400 associate members. AMEX
operates in much the same way as NYSE, but smaller companies may qualify for listing.
There are also regional stock exchanges that serve regional markets.
The over-the-counter market (OTC) sells and buys unlisted securities outside the organized
securities exchanges. About 5,000 brokers of OTC are scattered all over the country. They
trade unlisted stocks and bonds by phone and keep in contact with each other.
The prices of the securities are established by supply and demand. Electronic screens in the
offices of the brokerage firms display OTC transactions, so brokers continually keep customers
up to date on the latest prices.
Options are traded on the major stock exchanges, but also on a special market for options, the
Chicago Bond Options Exchange (CBOE).
:
approximately –
assets –
bond –
broker –
fee –
intermediary –
investor –
issue – , ;
list – ()
membership –
negotiate – ,
option –
order –
pretax –
previous –
previously –
primary –
scatter –
seat –
secondary –
security –
stock – ,
stockbroker – , ,
tangible – ()
transaction –
underwriter –
investment bank –
security exchange –
deal in – , ()
brokerage house –
New York Stock Exchange –
Big Board –
be listed – ()
meet the requirements –
publicly held –
American Stock Market Exchange –
associate member –
qualify for listing –
over the counter – (.: )
unlisted securities –
up to date – ,
Chicago Bond Options Exchange –
Exercise 1
Answer the questions:
1. What markets are securities bought and sold at?
2. What is the difference between primary and secondary markets?
3. What does a company do if it wants to issue securities?
4. What is the structure of a securities exchange?
5. Who are stock transactions handled by?
6. How do stockbrokers earn their money?
7. What requirements does a firm have to meet to be listed at NYSE?
8. What is the difference between NYSE and AMEX?
9. What securities does OTS market deal in?
10. How are the prices of securities established?
1
The Waltons invited their new neighbours over to dinner. During dinner Mr. Walton was asked
what he did for a living.
Eight-year-old Brian Walton jumped in and said, «Daddy is a fisherman!» To which Mrs. Walton
replied, «Brian, why do say that? Your daddy is a stockbroker, not a fisherman.»
«No, mom. Everytime we visit dad at work and he hangs up the phone he laughs, rubs his
hands together and says 'I just caught another fish'.»
2
Two women were walking through the woods when a frog called out to them and said: «Help
me, ladies! I am a stockbroker who, through an evil witch's curse, has been transformed into a
frog. If one of you will kiss me, I'll be returned to my former state!»
One woman took out her purse, grabbed the frog, and stuffed it inside her handbag. The other
woman, aghast, screamed, «Didn't you hear him? If you kiss him, he'll turn into a stockbroker!»
The second woman replied, «Sure, but these days a talking frog is worth more than a
stockbroker!»
:
aghast – ,
curse – ;
dad –