(5) Organization of Petroleum Exporting Countries (OPEC)
Trade Terms:
1. Economic integration经济一体化
2. Free trade area自由贸易区: The members remove barriers to trade among
themselves while still adopts each own external policy
3. Customs union关税同盟: The members remove barriers to trade among
themselves and adopt the same external policy 4. Tariff rates关税税率 5. Settlement
6. NAFTA北美自由贸易协定: North American Free Trade Agreement
7. Common market共同市场: The members remove barriers not only to trade but
also to factors of production and adopt the same external policy. 8. Banknotes circulation货币流通 9. Cartel卡塔尔
10. APEC亚太经合组织，亚洲太平洋经济合作组织: Asia Pacific Economic
Cooperation
11. OPEC石油输出国组织: Organization of Petroleum Exporting Countries 12. European Commission欧盟委员会 13. Council of ministers部长理事会
14. Dual-Ministerial Meeting双部长会议 15. Quota Restrictions配额限制
16. Economic Union (EU)经济同盟: The members remove barriers not only to trade
but also to factors of production, adopt the same external policy and harmonize their taxation, government expenditure, industry policies and use the same currency.
17. EU欧盟，欧洲联盟: European Union
18. EC欧共体，欧洲共同体: European Community
19. Benelux荷比卢（比利时、荷兰和卢森堡三国）:Belgium, Netherlands,
Luxemburg
20. Mercousur南方共同市场: Southern Cone Customs Union
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21. ECSC欧洲煤钢共同体: European Coal and Steel Community 22. EEC欧洲经济共同体: European Economic Community
23. EURATOM欧洲原子能共同体，欧洲原子能联营: European Atomic Energy
Community
24. SOM高官会议: Senior Officials Meeting
25. TILF贸易投资便利化自由化: Trade and investment liberation and facilitation 26. ECOTECH经济技术合作: Economic and technical cooperation 27. Political entity政治实体 28. Sovereign state主权国家 29. Multi-polarization多极化 30. Sub-committee分委员会
31. NTA新跨大西洋议程: New Transatlantic Agenda
32. TABD跨大西洋商业对话: Transatlantic Business Dialogue 33. TACD跨大西洋消费者对话: Transatlantic Consumer Dialogue 34. Territory economies区域经济体 35. Pacific Rim环太平洋圈
36. Informal Meeting of Economic Leaders领导人非正式会议
Answer the following questions:
1. What is a free trade area? Make a brief account of the most notable free
trade area in the world.
A: Free trade area is the loosest form in the regional economic integration. Members in this form removes barriers to the flow of goods and services among themselves while each member still adopts its own policy as regards to trade with outsiders. The most notable one is the North American Free Trade Agreement (NAFTA), the largest free market formed by the United States, Canada and Mexico in 1991 with over 360 million consumers and total GDP of more than 6 trillion US dollars.
2. In what way is a customs union different from a free trade area?
A: The Customs Union goes a step further by adopting the same trade policy for all the members toward countries outside their organization in addition to abolishing
trade barriers among themselves. Imports from other countries are subject to the same tariff.
3. What are the characteristics of a common market? Which organization
remained a common market for some years in the past?
A: The common market is further up the scale of regional economic integration. Besides free movement of goods and services and adoption of common external trade policy, factors of production such as labor, capital and technology are free to move among members so that they can be utilized in a more efficient and productive way. In the past, the European Community remained a common market for some years.
4. How much do you know about an economic union? Can members of an
economic union keep all of their national sovereignty?
A: The economic union is the highest form of economic integration, which is characterized by integration of the domestic policies of its members in respect of economy, finance etc. in addition to absence of trade barriers, practice of common external policy and free production factor mobility. The members of an Economic Union are required not only to harmonize their taxation, government expenditure, industry policies, etc., but also use the same currency.
The member countries of an economic union are required to surrender some of their national sovereignty, which is eroding the tradition of the world political system based on the autonomy and supreme power of sovereign states.
5. Make a brief account of the origin and development of the EU.
A: The first community, the European Coal and Steel Community (ECSC) was established in 1952, which set the stage for more ambitious integration efforts.
The signing of the monumental Treaty of Rome in 1957 marks the establishment of the European Economic Community with the aim of gradually realizing the free movement of goods, services, labor and capital as well as the harmonization of economic policies of the member countries.
Ten years later in 1967, the European Community was formed by merging EEC, ECSC and European Atomic Energy Community (EURATOM).
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1992 it became a true common market as envisaged by the Single European Act. Then on January 1, 1994 the European Union (EU) came into being on the strength of the Maastricht Treaty.
From the beginning of 1999 most of the members began to use the common European currency for accounting and settlement and in 2002, euro banknotes and coins were put into circulation.
6. What is the most powerful institution of the EU? What is the executive body
of the EU? How does it operate?
A: The most powerful institution of the EU is the Council of Ministers.
Its executive body is the European Commission composed of 20 commissioners overseeing 23 departments in charge of different affairs.
Decisions of the council are made by votes allocated to member countries on the basis of their size. Different ministers attend the council meeting depending on the matters discussed. The council even has the power to pass legislation.
7. Explain briefly the five layer organizational structure of Asia-Pacific
Economic Cooperation.
A: a. the Informal Meeting of Economic leaders b. Dual-Ministerial Meeting
c. Ministers Responsible for Trade d. The Senior Officials Meeting (SOM)
e. Subordinate committees under SOM: Committee of Trade and Investment, Economic Committee, Economic and Technical Cooperation Sub-committee of SOM and Budget Management Committee.
8. What are the tenet and objectives of APEC? What do its two wheels mean? A: The tenet and objectives of APEC are inter-dependence, mutual benefits, adhering to an open and multilateral trading system and reduction of regional trade barriers. Its two wheels mean trade and investment liberation and facilitation (TILF) and economic and technical cooperation (ECOTECH).
9. What are the nature and objectives of OPEC?
A: OPEC is a commodity cartel. It tried to limit the overall crude oil supply of the world for the purpose of maintaining higher oil prices.
Translate the following sentences into English:
1. 过去的几十年，地区经济一体化越来越重要。
The past decades witnessed increasingly growing importance of regional economic integration.
2. 最著名的自由贸易区是北美自由贸易区，它是由美国、加拿大和墨西哥于
1991年建立的。
The most notable free trade area is the North American Free Trade Agreement (NAFTA), the largest free market formed by the United States, Canada and Mexico in 1991.
3. 经济联盟成员国不仅要在税收、政府开支、企业策略等方面保持一致，而且
还应使用同一货币。
The members of an Economic Union are required not only to harmonize their taxation, government expenditure, industry polices, etc., but also use the same currency.
4. 欧洲委员会是欧盟的管理机构之一，此机构将提议呈交给部长理事会做决
定，并监督各成员国根据所制定的条约履行自己的义务。
The European Commission is one of the governing organs of the European Union. It is the body that puts proposals to the Council of Minister for decision and sees that the members carry out their duties under the treaty.
5. APEC建立于在澳大利亚首都堪培拉召开的一次部长级会议上。当时有12
位成员国出席，分别为澳大利亚、美国、加拿大、日本、新西兰和东盟六国。 APEC was set up at the Ministerial Meeting held in the Australian capital Canberra attended by 12 members of Australia, the United States, Canada, Japan, Republic of Korea, New Zealand and six ASEAN countries.
Lesson 4
Economic Globalization
Business Knowledge:
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(1) Economic globalization as an objective trend
A. Basic feature *
B. Advantages and negative impacts (2) Multinational corporations
A. Organization- parent and affiliates B. Characteristics
a. Enormous in size
b. Wide geographical spread c. Longevity and rapid growth C. Need, goals and roles
a. Profit b. Security
c. As vehicles for cross-border transfer resources D. Four types
a. Multi-domestic corporation b. Global corporation
c. Transnational corporation d. World company
Trade Terms:
1. Share holders股东
2. Economic globalization经济全球化 3. Board of directors董事会 4. Inputs投入
5. Economic environment经济环境
6. Parent MNC headquarter跨国公司母公司，总部 7. Affiliate MNC子公司，分支机构，附属机构 8. Branch company分公司 9. Subsidiary company子公司 10. Day-to-day running日常管理
11. MNC跨国公司=TNC: Multinational corporation, are made up of vast numbers
of foreign subsidiaries, companies in which over 50 percent is owned by the parent company.
12. Home county母国: The country where the headquarter of the investor is located. 13. Host country东道国: The host country is a foreign country where the investor
operates.
14. MNE跨国企业: Multinational enterprise: A typical multinational enterprise shall
be defined as a business organization which owns (whether wholly or partly), controls and manages assets, often including productive resources, in more than one country, through its member companies incorporated separately in each of these countries. Each member company is known as a multinational corporation. 15. Economies of scale规模经济
16. Increase and growth数量的增多和规模的增大
17. Revenue adjusted for inflation（除去通货膨胀后的）实际收入
Answer the following questions:
1. What are the basic feature and major role of economic globalization?
A: The basic feature of economic globalization is to free flow of commodity, capital, technology, service, and information in the global context for optimized allocation.
2. Mention some of the pros and cons of economic globalization. What is the
right attitude towards it? (有利和不利方面)
A: The pros is that with the basic feature of free flow of commodity, capital, technology, service, and information in the global context for optimized allocation, economic globalization is giving new impetus and providing opportunities to world economic development and meanwhile making the various economies more and more interdependent. While the cons of economic globalization is different countries and peoples do not enjoy balanced benefits.
The right attitude towards it is follow the trend closely, availing the opportunities it offers to develop ourselves and avoiding its possible impacts.
3. What is the formal definition of a multinational enterprise? How can you tell
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whether a multinational corporation is a parent or just an affiliate?
A: A multinational enterprise shall be defined as a business organization that owns (whether wholly or partly), controls and manages assets in more than one country. If the MNC is the original investing corporation, it is known as the parent MNC, which is normally also the international headquarters of the MNE. If the MNC is established as a result of investments by the MNE, whether through the parent or through another of its already established MNC, it is an affiliate MNC. 4. Describe briefly the characteristics of MNEs. A: The characteristics of MNEs is as follow:
a. MNEs are generally enormous in size b. Wide geographical spread c. Longevity and rapid growth
5. What is the commonly recognized objective of MNEs?
A: MNEs are formed for profit, and the second basic need is security.
6. Why is security so important to MNEs?
A: Without security, an MNE’s survival can never be assured. The need of security includes the security of profits in the short-and-long-run, the security of the MNE’s assets and investment, and the security of other organizational needs. Profit is useless if it cannot be secured by the MNE and transferred wherever it so desires.
7. Do you think “wide geographical spread” of MNEs plays a very important
role in the development of their business? Why?
A: Yes, I do. MNEs enables them to have a wide range of options in terms of decisions in areas such as sourcing and pricing. They are also more able to take advantage of changes in the international economic environment. Such multi-nationality also enables MNEs to engage in worldwide integrated production and marketing.
8. What is the relationship between MNEs and their host countries?
A: MNCs are under the legal jurisdiction of their host governments that can impose various rules, regulations, and laws on the MNCs to the extent of nationalizing all their assets.
9. What are the four types of multinational enterprises? Describe each of them
briefly.
A: The four types of multinational enterprises is that:
a. Multi-domestic corporation: it is a group of relatively independent
subsidiaries. The parent company delegates sufficient power to each subsidiary to manage the production and marketing in the host country for the needs of local customers.
b. Global corporation: it operates and views the world market as an integrated
whole. Power and responsibility are concentrated at the headquarters that manages production and marketing to achieve the economies of scale as much as possible.
c. Transnational Corporation: The activities and resources of the transnational
corporation are highly neither centralized as the second type nor decentralized as the first type but are integrated in an interdependent network of affiliates. d. World Company: their national identities are blurred to a large extent.
10. Are there may world companies at present? Imagine their future role in
complete globalization.
A: Now it is very few. When such companies become dominating, the possibility of conflicts among sovereign states may be greatly reduced. Possibly they will be instrumental to the realization of complete globalization.
Translate the following sentences into English:
1. 经济全球化为世界经济发展提供了新的动力和机会，同时也使各经济体更加相互依赖、相互影响。
Economic globalization is giving new impetus and providing opportunities to world economic development and meanwhile making the various economies more and more
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interdependent.
2. 跨国公司是在一个以上国家拥有、控制和经营资产的商业组织。
A multinational enterprise is a business organization that owns (whether wholly or partly), controls and manages assets in more than one country.
3. 许多人欢呼经济全球化带来的好处，但同时也有强烈的反对声音。
While many people are acclaiming the benefits brought about by economic globalization, there are also loud vices of opposition.
4. 除了总部以外，跨国企业组织也可能有不同的地区总部和业务总部。
An MNE may also have various regional or operational headquarters, in addition to international headquarters.
5. 跨国公司的内部交换占整个国际贸易的一个很大的比例。
The transfer of the Intra-MNE transactions constitutes a very significant proportion of total international trade.
6. 尽管公司的日常管理工作下放到跨过企业的子公司，但重要决策，如有关公司目标和新投资等都由母公司来决定。
Although the day-do-day running of corporate operation maybe decentralized to the affiliate MNCs, the major decisions, such as those on corporate goals and new investments are made by the parent company.
7. 无论人们是否喜欢，经济全球化已成为世界经济发展中的一个客观趋势。 Like it or not, economic globalization has become an objective trend in world economic development.
Lesson 5
International Trade I
Business Knowledge:
(1) The definition of international trade (2) Two reasons for international trade