Trade is the voluntary exchange of goods, services, or both of which also called commerce or transaction. Evidently, this topic is familiar to almost everyone, in particular students of economics major. To mention about trade, we can point out a lot of subtopics related such as modern trends of trade, benefits and drawbacks of trade, and so on. In this Market leader course book, the authors cover almost featured knowledge about trade in the structure of 5 parts I. Start up with discussion about globalization II. Vocabulary related to “ trade” III. Reading: Fair trade IV. Language skills for negotiation of a business deal V. Case study about negotiation
Unit 9: Trade FOREIGN TRADE UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION Assignment: TRADE Intructor: MS. …. Group 2 : 1. Nguyễn Thị Hồng vân 2. Nguyễn Nga Hằng 3. Nguyễn Thị Thu Hiền 4. Phạm Thị Lan Hương Class : A2 – K46 Major: International Business Hanoi, 18 th , January, 2010 Introduction 1 Unit 9: Trade Trade is the voluntary exchange of goods, services, or both of which also called commerce or transaction. Evidently, this topic is familiar to almost everyone, in particular students of economics major. To mention about trade, we can point out a lot of subtopics related such as modern trends of trade, benefits and drawbacks of trade, and so on. In this Market leader course book, the authors cover almost featured knowledge about trade in the structure of 5 parts I. Start up with discussion about globalization II. Vocabulary related to “ trade” III. Reading: Fair trade IV. Language skills for negotiation of a business deal V. Case study about negotiation Our group has spent much time researching this topic and now presents here the most remarkable information which is certainly useful for you. Please let us know if there are any problems with our assignment. 2 Unit 9: Trade I. STARTING UP - GLOBALIZATION Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world. Globalization is not new, though. For thousands of years, people - and, later, corporations - have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. Likewise, for centuries, people and corporations have invested in enterprises in other countries. In fact, many of the features of the current wave of globalization are similar to those prevailing before the outbreak of the First World War in 1914. This current wave of globalization has been driven by policies that have opened economies domestically and internationally. In the years since the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international industrial and financial business structure. Moreover, the survival in the new global business market calls for improved productivity and 3 Unit 9: Trade increased competition. Due to the market becoming worldwide, companies in various industries have to upgrade their products and use technology skillfully in order to face increased competition. Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life. Information technologies have given all sorts of individual economic actors - consumers, investors, businesses - valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with far-flung partners. Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people. Resistance to globalization has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital, labor, goods, and ideas that constitute the current wave of globalization. To find the right balance between benefits and costs associated with globalization, citizens of all nations need to understand how globalization works and the policy choices facing them and their societies. 4 Unit 9: Trade II . VOCABULARIES 5 Unit 9: Trade 6 Vocabularies Explaination Structure and idioms Example English Vienamese Global ['gloubəl] involving the entire earth; not limited or provincial in scope Toàn cầu global strategy : chiến lược toàn cầu Many people wish they could have a global tour. Tax [tæks] A charge, especially a pecuniary burden which is imposed by authority Thuế + sales tax: thuế doanh thu + to levy a tax on something:đánh thuế vào cái gì The car tax in VN is very high Liberalise [‘libərəlaiz] to free from narrow views or prejudices; to make less strict Mở rộng tự do There is a move to liberalise economy. Barrier ['bæriə] an object like a fence that prevents people from moving forward from one place to another hàng rào + to barrier the way: chặn đường + to barrier in: cản không cho vào + to barrier out: cản không cho ra We must try our best to break the tax barrier. Border ['bɔ:də] A boundary; a frontier of a state or of the settled part of a country biên giới Ural is considered the natural border bettwen the Asia and the Europe . Custom ['tærif] The taxes that must be paid to the government when goods are brought in from other countries Thuế nhập khẩu; hải quan + preferential tariff:quan thuế ưu đãi + to raise tariff barriers: lập hàng rào quan thuế We must raise tarriff barriers agaist foreign goods. Subsidize ['sʌbsidaiz] to aid or promote, as a private enterprise, with public money Trợ cấp subsidized industries: các ngành công nghiệp được bao cấp In our country, there have many Unit 9: Trade III. READING A. Before reading: 1. What is Fair Trade? Fair Trade is an organized social movement and market-based approach that aims to help producers in developing countries and promote sustainability. The movement advocates the payment of a higher price to producers as well as social and environmental standards. It focuses in particular on exports from developing countries to developed countries, most notably handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate and flowers. 2. Traditional export products of some countries: Bananas 1. India, Ecuador Coffee 2. Brazil Sugar 3. Brazil • India Produces Most Bananas but Ecuador is King of Banana Exports ( http://internationaltrade.suite101.com) 3. Typical problems which the exporters face when selling aboard: - The protection of the government for domestic market (quota, tax, barrier ) - Domestic competitors - Not good understanding of consumption habits B. Reading: UK develops taste for fair trade. Summary: The banana and sugar cane growers are facing ruin and cannot break into the European or US market because of high tariffs and heavy subsidies. But the growing “fair trade” market can protect them from depressed world commodity markets and the price war between giant multinationals. Fair trade, according to its supporters, plays an important role in tackling the poverty. Now, fair trade food is booming with the growth of more than 25% a year internationally and 100% a year in Britain, the largest market after Switzerland. Trading fairly was designed to reduce the injustices of the world trading system but ironically it could itself become a victim of the WTO because its rules prohibits differentiation between the products on the basis of their means of production. However, the fair trade shows 7 Unit 9: Trade that charity is not needed to lift people out of poverty and that social and environmental standards can be put into trade. VI. USEFULL LANGUAGE AND SKILLS This is the content of the meeting in which Ashbury company and KGC negotiates about the conditions and term of the order. In this text , there are a lot of necessary useful language and skills which seem quite popular in negotiating. The content of the meeting Ashbury Company: Nice to meet you. Let me introduce about myself. My name is Hien, the owner of Ashbury Guitars. And this is Ms Huong, our marketing director. KGC : Nice to meet you. I’m Hang, the Marketing Director and she is Ms Van, the Director, from Kim guitar company KGC : We come here to reach a deal with you today. After discussing through email, we should make clear some main points. As you know, we agreed to supply you 3 models: SG1000, SG500 and SG200. SG1000 has some special additional features which satisfy your requirement. Ashbury Company: Right, let’s talk more about the quality. KGC :: We suggest 40% of the order to be manufactured by other Korean firms Ashbury Company: Actually, I request you to produce all the guitars in your own factory as I’m afraid that the quality of the goods are not guaranteed if you use parts of other manufacturers. KGC : But it seems difficult for us this time. We have to fulfill many other customers since these products are in great demand. Maybe we think about a lower percentage, say 20? 8 Unit 9: Trade Ashbury Company: We are indeed not satisfactory at all. But we can accept this percentage if all prices include transport costs to Pusan, Korea. KGC : Sound a good idea to me. Ashbury Company: What about discount? If we order 1800 units, what discount will you offer? KGC : On 1800, 3%. But if you place an order of at least 2000, we will offer you a bit higher discount. Ashbury Company: OK, I’ll think about that. If we place such a very large order, say 2000, are you able to dispatch immediately? KGC :: We can normally guarantee to dispatch a large order within 3 weeks. But if you order at a peak time, like just before May, it will be impossible to deliver that quickly. Ashbury Company: To be honest, we hope that delivery will be made not later than 1 st May in time for the music festivals sales period in California. KGC : We can understand that. I think the delivery made in 2 shipments, 50% on 1st May and remaining 50% on 15th May seems more suitable. Ashbury Company: If you give us a 5% discount, we will agree that. KGC: 5%? That’s more than we usually offer new customers. But it might be possible . Ashbury Company: That’s alright. Anyway, if you don’t deliver in time, we won’t order from you again. And what about payment? I want to pay a deposit of 50% immediately, remaining after 1 month after receiving goods. KGC: Frankly, we would prefer payment made by L/C, DP as this is our first business. If you were a regular customer, we would offer you 30 days’ credit. Ashbury Company: What do you mean? KGC : As per the delivery condition, we would like you make the payment immediately after each shipment. Ashbury Company: Are you saying: 50% after the first shipment and 50% for the last? KGC: Exaclty what I mean. 9 Unit 9: Trade Ashbury Company: That’s alright. We will make it by bank transfer as soon as the goods have been dispatched. Hằng : Good, we have agreed on price, quality, quantity, discount, delivery and payment. Let’s see the guarantee. Ashbury Company: We hope a guarantee of at least 3 years. KGC : It’s OK. Great. We’ve got a deal. I’ll send you an email covering everything agreed. Please let me know if there are any problems. Ashbury Company: That’s good. Uhm…Look, it’s time for lunch. How about a small party to congratulate on our good relationship today? KGC : Great. It’s our honour. Ashbury Company: Let’s go * Note: The words which are highlighted are useful language in negotiation. V. CASE STUDY 1. MINUTES A. Context - Date: 7 th April, 2009 - Time: 9 A.m - Place: Head office of Ashbury Guitars , San Francisco B. Participants: - Kim Guitar Company: Ms Van Nguyen – The Director, Ms Hang Nguyen – the Marketing director - Ashbury Company: Ms Hien Nguyen – The Director, Ms Huong Pham – The Marketing Director We can point out the terms and conditions agreed during negotiation as follows: 1. Models: SG 1000, SG 500, SG200 SG 1000: special additional features 2. Quality: 10 [...]... Your sincerely, Richard Gratt (Signature) Encs: price-list 12 Unit 9: Trade Index Introduction I Vocabularies II Starting up - Globalization III Reading – Fair trade …………………… …………………… …………………… 1 2 7 …………………… 9 …………………… 9 - Negotiation V Case study …………………… 11 - Minutes …………………… 12 - Commercial correspondence …………………… 14 - What is fair trade? - Reading IV Useful language and skills 13 ... week and were very pleased to point out some terms and conditions we have established We can confirm that there would certainly be no trouble in supplying you from our wide range of guitars 11 Unit 9: Trade Enclosed you will find our price list of 3 models you have ordered quoting prices CIF Pusan, Korea including transport costs 20% units of the order will be made by other Korean manufacturers to meet...Unit 9: Trade 3 4 5 6 7 - All the guitars with 20% manufactured by other Korean firms Quantity: First order: SG 1000: 500 SG 500:1200, SG 200: 300 Prices: SG 1000: $920 SG 500: $550 SG200: $475 All the prices . globalization works and the policy choices facing them and their societies. 4 Unit 9: Trade II . VOCABULARIES 5 Unit 9: Trade 6 Vocabularies Explaination Structure and idioms Example English Vienamese Global ['gloubəl] involving. Are you saying: 50% after the first shipment and 50% for the last? KGC: Exaclty what I mean. 9 Unit 9: Trade Ashbury Company: That’s alright. We will make it by bank transfer as soon as the goods. Quality: 10 Unit 9: Trade All the guitars with 20% manufactured by other Korean firms 3. Quantity: First order: - SG 1000: 500 - SG 500:1200, - SG 200: 300 4. Prices: - SG 1000: $92 0 - SG 500: