А international trade

1. Before you start. Think of things that you have in your home or university, e.g. a fridge, a TV, a computer. What are the names of the companies that made them?

2. Reading. Read the text and correct the statements.

1) British companies don't sell overseas.                                              □

2) Multinational companies sell the same products in different markets. □

3) Increased competition is good for producers and bad for customers. □

4) Changes in the exchange rate are not important in international trade. □

International trade is when companies from one country sell their products or services in other countries. For example, the UK produces cars, machinery, oil, and chemicals, which it exports to overseas markets. Other British exports include services like banking and travel. These earn foreign currency for the UK. Imports to the UK include cars, food, and electrical goods.

Many companies set subsidiaries overseas, either for manufacturing or for distribution, or both. These companies are called multinationals - Shell, Ford, and Sony are examples. Most multinational companies 'think global and act local.' This means that they try to understand and cater for the needs of every market they sell in.

International trade means there are more companies competing with each other to sell their products. This means lower prices, which is good for customers because they pay less and have more choice. Producers, however, make less profit. Multinational companies often look for ways to reduce their costs, for example, by manufacturing their products in countries where labour costs cheap.

Changes in exchange rate can make a company more or less competitive. The exchange rate is the amount of one currency needed to buy another currency. For example, in 2002, one British pound bought about 200 Japanese yen, so the exchange rate was 1:200. If the exchange rate falls, exports become cheaper, so companies become more competitive. If the exchange rate rises, exports become more expensive, so companies become less competitive.

3. Vocabulary. Match the words and phrases in the text in bold with the definitions (1-8). Then write the words and phrases in your language.

1) what a company pays for its workers _________________________

2) the type of money used in another country or market ____________

3) the value of one currency compared to another _________________

4) smaller companies that are part of a larger company _____________

5) companies that operate in more than one country _______________

6) things produced in your country and sold in other countries _______

7) places abroad where you can sell your products ________________

8) things produced in other countries and sold in your country _______

4. Look at the word map for the verb compete. Make similar word maps for these words: produce, employ, operate. Use a dictionary to help you.

5. Speaking. Work in pairs. You work for a multinational company. You are looking for a new overseas market to manufacture and sell your products in. Look at this information about two possible international markets. Discuss which market seems better, A or B.

Get real

Use newspapers, magazine articles or the Internet to find out about a multinational company that interests you. Find out what it makes, what are its main markets, and where its subsidiaries are. Prepare a short talk.