Unit 6—Trade

Most countries realize the advantages of world trade. Countries have developed their economies, increased production of goods and met market demands through increased world trade. International trade develops because certain countries are able to produce some goods more efficiently than other countries. They exchange goods to satisfy their needs and wants. Efficient production may be the result of several factors A certain climate in a particular country may allow that country to grow agricultural products in abundance. Countries with a large pool of unskilled laborers are able to produce products which are labor-intensive more cheaply than countries with highly paid skilled labor forces. Another factor is geographical location. Countries like Singapore and Panama engage in banking and trading because they are located on world trade routes. The process of globalization leads to development of free trade. It becomes possible due to deregulation and liberalisation. Restriction on import are getting less strict, for example custom procedures are simplified, customs tariffs are getting lower, no quotas are established. The policy of open borders is quite typical for industrial nations now. But free trade is not always a good thing and is not always possible. Even developed countries have to protect domestic producers, especially in strategic industrie. So they have to subsidize such industrie or put up some barriers in overseas trade to prevent them from failure.

The most important point in the international trade is methods of payment. The irrevocable letter of credit is one of the most common method of payment in international trade. Other methods of payment are payment by draft or bank transfer. The buyer applies to the bank for the letter of credit in favour off seller. In his application for the buyer must show the total value of the contact and encloses list specifying the goods to be sold under the contract. The person in who`s favour the LC is granted and who gets the money is called beneficiary. The shipping terms in international trade are specified in Incoterms. This document is recognized by most countries. The most common are CIF and FOB. The bank affects payment to the seller only against bill of lading and other necessary shipping documents.

Unit 13- Cultures

Culture is the way we do things around here The “here” in question may be a country, a region, a company, a university. Clearly we each live in a set of cultures and subcultures that interlock in complex ways. One of the most dangerous things is to generalise about them. Stereotypes are of course to be handled with caution. The stereotypes may represent the middle of a range of differing behaviours, it may be at one extreme or it may just not true. To grasp at first glance the difference is too hard, only gets involved in one of the cultures will make it seem more apparent. Cultural awareness play general role in business relations. If businessman work in multinational company he must have image about others cultures. For example it`s important to know start meeting with exchanging business card or giving presents, need to shake hands or may be kissing. There are some areas where there are variations in behaviour across different cultures, such as: religion- does it play a role in business life? Many developed countries don’t permite sex and race discrimination .Different kinds of cultures affect business. There are different attitudes towards work, and towards resolving problems and working in teams. You should have e very open attitude to how people approach work.