Unit 6 Trade

By Suzanne Bell,2014-10-19 02:43
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Unit 6 Trade

    Unit 6 Trade


    --Business brief

    What is international trade (foreign trade)?

    ; The exchange of goods and services between nations (not domestic trade) ; International trade takes place within the framework of agreements worked by

    countries in the World Trade Organization (WTO). Goods

    ; Finished goods

    ; Intermediate goods used in producing others goods ; Agriculture products and food stuffs

    Why the nations would like to have international trade? (import---export) ; A nation specializes in some goods

    ; Better access to raw materials

    ; It can produce most cheaply and effectively

    --Ask Ss to write three or four things that your country import ; Cars

    ; Food stuffs

    ; Big machines

    ; Oil

    --Ask Ss to tell the reasons why our country import goods from others countries?

    (Why some people in country choose imported goods rather than domestically produced good?)

    ; High quality

    ; Fashion style

    ; Good design

    ; Reliable

    ; Durable

Understanding Quotation

    --Ask SS whether they are for or against international trade --Two concepts

    Import: goods from other countries

    Investment: money from other countries

    China needs more investment than importing goods.

Every time we buy a foreign car we put someone else out of work.

     --- Woodrow Wyatt, British politician and writer

    (Importing causes unemployment )

    --Explain some economic terms, phrases

    WTO (World trade organization): General Agreement on Tariff and Trade (GATT)

    Trade barriers (Government intervention)


; Tariffs: duty to be paid on import or export

    ; Protectionism: some protection measures taken by developing countries to get

    their domestic industry going, by refusing import the same products from other


    ; strategic industries: individual nations they see some products as their specific

    interests, vital to their future prosperity

    ; infant industries: the new beginning industry of a nation

    ; subsidies: governments guarantee farmers a higher price than they would

    normally get, making it hard for developing nations to compete in agricultural


    ; quotas: in order to protect their own products, pointing the uniqueness of their

    industry, and winning restrictions on the number of the products that they

    would import.

    ; Dumping: exported good are sold at less than in the home market, or for less than

    they cost to produce, usually in order to gain market share in the export market. ; restrictions

    ; customs

    ; tariff wall ( European Union, North American Free Trade Organization,


    Free trade (the ideal for almost all nations)

    ; Open borders

    ; Deregulation

    ; Laisser-faire

    ; Free port

    ; Liberalise

    Start up

    ; Task C

    --Explain two concepts

    GDP(gross domestic product): the total annual value of a countrys goods and services

    GDP per capita: the GDP of a country divided by the population

     Such as a country like China has a huge overall GDP, but a low GDP per capita. While countries like Russia and Brazil are relatively rich in natural resources, their per capita GDP is low in comparison to the USA, Germany, or the UK. Japan and

    Singapore on the other hand, which are poor in natural resources, have a high per

    capita GDP.

Vocabulary: Free trade

    ; Task A

    This section introduces some basic vocabulary which is useful to discuss the topic of international trade.

    Free trade

    ; Trade without restrictions on the movement of goods

    --Get the Ss to work through the exercise individually.

    --Go through the answers with the whole class.


In favor of free trade Against free trade

    Open borders Barriers

    Laisser-faire Dumping

    Deregulation Protectionism

    Free port Quotas

    liberalise Tariffs

    Strategic industries


    Infant industries



    ; Task B

    --Get Ss to discuss these questions

    ; Is free trade always a good thing?

    ; Do you think it leads to the creation of jobs, or to unemployment? ; Should certain industries be protected? If so, which?

; Task C

    --Ss work through exercise C in pair, going on to exercise D when they have finished

    --Check the answers with the whole class

    C 1 e) 2 d) 3 f) 4 b) 5 g) 6 c) 7 a)

D to break into a market Exporter

     To carry out a market survey Exporter or importer

     To place an order Importer

     To meet a delivery date Exporter

     To quote a price Exporter

     To arrange insurance cover Exporter or importer

     To comply with regulation Exporter

Reading: letter of credit

    One major concern in international trade between smaller companies is payment. The

    exporter wants to be sure about getting paid and the importer wants to be sure of

    getting the goods. A common solution is the letter of credit. --What is letter of credit?

    ; Where a bank guarantees payment to the exporters bank once it receives the

    related shipping documents,

    ; including the clean bills of lading, showing the goods have been shipped without

    damage or other problems.

    ; Shipping terms like CIF, or carriage insurance freight, where the exporter pays

    for insurance of goods which they are being transported, are part of the stand

    incoterms defined by the international chamber of commerce. Theses terms

    are used in standard contracts that form the basis, with adaptation, for most

    international trade contracts.


This reading is based on a letter from an exporter requesting the bank to open a

    letter of credit. Ss extract information to complete a form, answer comprehension questions and write a letter.

    ; Task A

    --Get Ss to read through the form for the information they need. --Tell Ss to read the letter and complete the form

    --Go through the answers with the whole class.

    Exporter: Julian Montero Goods: red & white wines

    Importer: Connoisseur Quantity: 500 cases

    Value: US$ 50,000

    Method of payment: irrevocable letter of credit

    Documents required: four clean copies of the bills of lading

    Contract restriction: no part shipments

    ; Task B

    --Get SS to read the questions and answer any they can from memory. --Go through the answers with the whole class

    1 in 30 days

    2 brands and quantities

    3 Julian Montero

    4 a copy of the letter to the correspondent bank in Argentia

    ; Task C

    --Tell Ss to read through the instructions to Exercise C --SS work through the matching exercise individually. --Check the answers with the whole class

    1 d) 2 a) 3 i) 4 c) 5 j) 6 h) 7 e) 8 b) 9 f) 10 g)

Language review: conditions

    In this section Ss revise and practice sentences with if in the context of negotiation (i.e

    stating conditions and making concessions)

    ; Task A

    --Ask Ss to think of possibilities for the gaps before they listen. Encourage faster pairs

    to think of several possibilities

    --Play the recording for them to check their answers 1 we buy

    2 you buy

    3 I place

    4 you get it

    5 you can increase

    6 we agree

    ; Task B

    --Ask Ss to make a conversation, using all the words in the notes and add as much as

    they like.

    --When pairs have finished, get them to act out the conversation. --Possible answers:


P: If you order 2,000 cases, well give you a 10% discount and deliver before the

    Xmas rush. We will also cover the insurance costs

    B: We get less demand for Santa Rita. A 10% discount is ok. But we only want 1,500


    P: I am sorry. We cant agree to that.

    B: Well, if we order 2,000, well want another 3% discount.

    P: We cant increase the discount by 3%, but we can give you another 1% only, plus 30 cases of champagne. Thats a pretty fair offer!

    B: Ok, youve got a deal.

Listening: Negotiating techniques

    In this listening (in two parts) Kevin Warren, an Executive Vice president at Coca in the UK talks about his own experience of negotiating and the strategies he employs, and gives some tips for successful negotiating.

     Task A-B

    --Tell Ss that the letter L-I_M stand for the three goals that Kevin sets himself before he goes into any negotiation.

    --Explain in that they should listen to hear what these goals actually are and for the specific example of Kevins own L_I_M in negotiation that he took part in recently. --Play the recording, Ss do the exercises individually and compare answers with a partner.

    --Go through the answers with the whole class.

    A L-I-M stands for Like, Intend, Must.

    B Like: to win the business there and then.

     Intend: to show they were professional and competent and could meet their needs.

     Must: Keep the dialogue open and ensure that the competitor didnt win the


    ; Task C-D

    --Get Ss to predict what the tips might be in pairs or groups of three. --Play the recording once or twice.

    --Go through the answers with the whole class.

    1 identify who the decision makers is

    2 focus on the buyers need, not your own need.

    3 leave when youve made the sale- dont keep talking

    ; Task E

    --Ss do the exercise individually and then compare answers in pair or small groups. --Go through the answers with the whole class.

    1 a ) 2 b ) 3 a ) 4 b ) 5 a ) 6 b) 7 a )

Skills: Negotiating

    In this section Ss discuss some ideas about negotiating-its stages and the different styles available to negotiators-and do an awareness raising exercise with some typical negotiating language.

    ; Task A


    --Divide the class into two groups: sellers and buyers --Ask the sellers to think of something to sell. Give the sellers a time limit of three or

    four minutes to sell their products to the buyers at an agreed price.

    ; Task C

    The Art of Winning: seven steps of negotiating

    1 ready yourself

    2 explore each others needs

    3 signal for movement

    4 probe with proposals

    5 exchange concessions

    6 close the deal

    7 tie up loose ends


    ; Task D

    --Two extreme styles of negotiator: red stylists and blue stylists Red stylist

    ; Want something for nothing

    ; Try to win by showing they are stronger than the other person

    ; See negotiation as a short-term activity

    ; Use tricks and pressure to get what they want

    Blue stylist

    ; Want to trade something for something

    ; Try to succeed by cooperating with the other person

    ; See negotiation as a long-term activity.

    ; Do not use tricks. They think about each others interests.

Case study:

    US distributor Ashbury Guitars wants a Korean guitar makers to manufacture a range

    of guitars under the Ashbury name. SS negotiate the contract. Back ground information

    --Book closed, find out how many of your Ss play an instrument and briefly elicit details. Elicit a few more details from anyone who plays the guitar. --Tell Ss to read through the background information to the situation individually,

    write KGC, Ashbury Guitars and The meeting on the board. --Give the task to Two groups to prepare their performance.


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