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FOREIGN TRADE

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Foreign trade is an essential part of a nation's economy but governmental restrictions are sometimes necessary to protect national interests. Govern-ment actions may occur in response to the trade policies of other countries or in order to protect specific depressed industries.

One method of limiting imports is simply to close the channels of entry into a country. Usually maximum allowable import quantities known as quotas may be set for specific products. Quotas serve as the quickest means of stopping or even reversing a negative trend in a country's balance of payments as well as of protecting domestic industry from foreign competition.

Another common way of restricting imports is by imposing tariffs or taxes on imported goods. A tariff paid by the buyer of the imported product makes the price higher for that good in the importing country. The higher price reduces consumer demand, effectively restricting the import. The taxes collected on the imported goods also increase revenues for the nation's government. Tariffs also serve as a subsidy to domestic producers of the goods taxed.

In recent years the use of non-tariff barriers to trade has increased. It may result in some administrative regulations that discriminate against foreign goods and in favour of domestic ones. Direct government support of depressed domestic industries is considered as a non-tariff barrier to trade, as such support puts the aided industries at an unfair advantage among trading nations.

Vocabulary:

administrative regulation [qd'mInIstrqtIv "regjV'leISqn] – административное регулирование

barrier ['bxrIq] n. – препятствие, преграда

depressed industry [dI'prest 'IndqstrI] – отрасль промышленности, переживающая спад (кризис)

discriminate [dI'skrImIneIt] v. – ущемлять

domestic industry [dq'mestIk 'IndqstrI] – отечественная промышленность

essential [I'senSql] a. – обязательный, существенный, необходимый

quota ['kwqutq] n.- квота, лимит

restriction [rI'strIkSqn] n. – ограничение

revenue ['revInjH] n. – доход

specific [spI'sIfIk] a. – определенный, конкретный

subsidy ['sAbsIdI] n. – субсидирование

tariff ['txrIf] n. – тариф, расценка

 

Answer the following questions:

1. Why are governmental restrictions of foreign trade sometimes necessary?

2. What do quotas provide?

3. How do tariffs or taxes on imported goods work?

4. What is considered as a non-tariff barrier to trade?

5. How does it work?


ТЭ, ЭЭ, ТСБ, ПВ (II семестр)


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