Foreign Trade

Foreign trade is a major factor in economic development of any country including Russia.

Foreign trade comprises three main activities: importing (buying goods from foreign Sellers), exporting (selling goods to foreign Buyers) and re-exporting (buying goods from foreign Sellers and selling them to foreign Buyers without processing in one's own country).

All commercial activities in foreign trade may be divided into basic ones associated with conclusion of foreign trade contracts for the exchange of goods and auxiliary ones ensuring their successful performance.

In foreign trade contracts and agreements are concluded to ensure the fulfilment of transactions. In accordance with commercial usage existing in the world contracts may be concluded either verbally or in writing.

A written contract is made out in the form of a document signed by the Parties. There are different types of contracts but most of them include the following clauses:

• naming, definition of the Parties;

• subject of the contract;

• prices and the total amount of the contract (including terms of delivery);

• time of delivery;

• terms of payment;

• transportation (carriage) of goods (packing and marking, shipment);

• sanctions and compensation for damage;

• insurance;

• force majeure circumstances;

• arbitration;

• general provisions.

In the case of a contract for sophisticated machinery and equipment there may be other clauses: technical conditions, test and inspection conditions, requirements to technical documentation, supervision of erection and putting the machinery into operation (commissioning), etc. These clauses may be included in the contract itself or in the Appendices to the contract, which are an integral part of it.

Before selling the goods it is necessary to do a lot of market research. Marketing is a system of running all the business activities of a company in respect of coordinating supply and demand for the goods produced and sold. Originally marketing was meant to help avoid over-production in advanced countries.

Advertising is an integral part of successful trade activities and is an important means of promoting the goods that are being produced and sold. Different kinds of mass media - TV, radio, newspapers, journals, and posters are used for advertising goods. Special leaflets, booklets and other printed matter about the goods may be published for the same purpose. Participation in fairs and exhibitions helps promote the goods as well.

Foreign trade may successfully be carried on direct between domestic enterprises and foreign firms and indirect through middlemen.

When new markets are to be gained it may be advantageous to use the services of foreign agents who have a long experience of trading and know the market in their country better.

It is necessary to distinguish clearly between the Agent and the Distributor. The commercial Agent is engaged in the negotiation with customers about the contract for sale of goods on behalf of a principal and for his account for which the Agent reserves an agreed commission. The Distributor operates on his own account as an independent purchaser for sale of the supplier's products, getting his remuneration from whatever profit he may make out of these sales.

Today Russia is an active participant in the foreign trade activities. Nowadays more than 13 000 enterprises and organizations have the right to trade with other countries and have for this purpose foreign trade export-import departments and firms working on a profit or loss basis.

Ex. 4. Give Russian equivalents for the following:

foreign trade; to comprise; processing; subject of the contract; to ensure the fulfilment; to conclude the contract verbally; written contract; total amount; compensation for damage; packing and marking; sophisticated machinery; to put into operation; advertising; to promote the goods; to run the business activity; domestic enterprises; on behalf of; to get remuneration; to distinguish .

Ex. 5. Give English equivalents for the following:

устно; соединять; обеспечение; наблюдение; сделка; включать; вспомогательный; гарантировать выполнение; внешняя торговля; предмет контракта; условия платежа; средства массовой информации; спрос и предложение; заниматься бизнесом; форс-мажорные обстоятельства; вести переговоры; получать вознаграждение; на основе прибыли; отечественные предприятия.

Ex. 6. Insert prepositions where necessary.

1. All commercial activities in foreign trade may be divided...basic and auxiliary ones.

2. A written contract is made … the form … a document signed … the Parties.

3. Basic commercial activities are associated ... conclusion ... foreign trade contracts ... the exchange ... goods.

4. Foreign trade may successfully be carried ... direct ... domestic enterprises and indirect ... middlemen.

5. The commercial agent is engaged ... the negotiations ... customers ... the contract ... sale ... goods ... behalf ... a principal and ... his account.

6. Today Russia is an active participant ... the foreign trade.

7. ... accordance ... commercial usage existing ... the world contracts may be concluded either verbally or ... writing.

Ex. 7. Complete the following sentences:

1. More than 13000 enterprises and organizations have the right … .

2. Marketing is a system of … .

3. Participation in fairs and exhibitions helps … .

4. Foreign trade may successfully be carried on … .

5. It is necessary to distinguish clearly … .

6. The commercial agent is engaged in … .

7. All commercial activities in foreign trade may be divided into … .

8. Contracts may be concluded … .

9. Foreign trade comprises … .

10. A written contract is made out in … .

Ex. 8. Translate from Russian into English.

1. Реклама является неотъемлемой частью успешной торговой деятельности, а также важным средством продвижения произведенных и проданных товаров.

2. Для завоевания новых рынков выгодно использовать услуги иностранных агентов, имеющих долгий опыт торговли и лучше знающих рынок в своей стране.

3. Прежде чем продавать товар, необходимо провести тщательное исследование рынка.

4. Продвижению товара также помогает участие в ярмарках и выставках.

5. Во внешней торговле контракты и соглашения заключаются для того, чтобы обеспечить выполнение сделки.

6. Существуют разные виды контрактов, но большинство из них включают следующие пункты.

7. В случае заключения контракта на поставку сложных машин и оборудования могут быть и другие пункты.

8. Эти пункты могут быть включены в сам контракт или в приложение к контракту, которое является его неотъемлемой частью.

9. Первоначально под маркетингом понималась помощь избежать перепроизводства товаров в развитых странах.

10. В наши дни Россия является активным участником международной торговли.

Ex. 9. Put questions to the underlined words.

1. All commercial activities in foreign trade may be divided into basic and auxiliary ones.

2. In foreign trade contracts and agreements are concluded to ensure the fulfilment of transaction.

3. Before selling the goods it is necessary to do a lot of market research.

4. Originally marketing was meant to help avoid over-production in advanced countries.

5. Participation in fairs and exhibitions helps promote the goods as well.

6. It is necessary to distinguish clearly between the Agent and the Distributor.

7. The Distributor operates on his own account as an independent purchaser for sale of the supplier's products.

8. Nowadays more than 13000 enterprises and organizations have the right to trade with other countries.

9. Foreign trade is a major factor in economic development of any country including Russia.

10. Different kinds of mass media are used for advertising goods.

Ex. 10. Answer the following questions:

1. What is foreign trade?

2. What activities does foreign trade comprise?

3. Why are contracts and agreements concluded?

4. How are contracts and agreements concluded?

5. Who signs the contract?

6. What clauses do most of the contracts include?

7. What is it necessary to do before selling the goods?

8. What is marketing?

9. What is an important means of promoting the goods?

10. What is used for advertising goods?

11. What is the commercial Agent engaged in?

12. How does the Distributor operate?

13. Is Russia an active participant in the foreign trade activities?

14. How many enterprises and organizations of Russia have the right to trade with other countries?

Ex. 11. Retell the text "Foreign Trade".

Ex. 12. Translate the dialogues from English into Russian.

Put them into reported speech.

1.

Almazov: Mr. Bright, I'm sorry to say we cannot sign the contract with your company at this price. It's unreasonably high. We are in close touch with the world market and our information is that your competitors are quoting lower prices.

Bright: You are partly right. It's true, the price is high, but you should take into consideration the fact that this model is the latest word in electronic industry. It is designed on the most modern lines and we can guarantee high reliability of the computers.

A: We know all that. Nevertheless the price doesn't seem attractive. Will the final price depend on the number of computers we'll buy from you, Mr. Bright?

B: Right. If you increase your order to five computers we'll be able to give you a 2% discount off the price.

A: I'm afraid the discount is too small. I expected at least a discount of 4 %.

B: Let me make some calculations. Well, Mr. Almazov, 3% and not more as this concession leaves only a very small profit for ourselves.

A: In this case I'd like to discuss the matter again with my people and after that I'll be able to give you my final reply.

B: Good.