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The Basics of Tariffs and Trade Barriers
Tariffs are a political tool that has been used throughout history to control the amount of imports that flow into a country. They determine which nations will be granted the most favorable trading conditions. High tariffs create protectionism, shielding a domestic industry’s products against foreign competition. High tariffs usually reduce the importation of a given product because the high tariff leads to a high price for the customers of that product. Tariffs are generally imposed for one of four reasons:
Opponents of tariffs argue that tariffs hurt both (or all) countries involved, those that impose the tariff and those whose products are the target of the tariffs. A decline in business leads to fewer jobs and spreads the slowdown in economic activity. However, tariff opponents argue that the costs of tariffs can not be ignored. These costs come when the price of the goods on which the tariffs were imposed has increased; the consumer is forced to either buy less of these goods or less/fewer of some other goods. Despite these arguments that tariffs are eventually harmful to all parties in a trade relationship, they have been used by all nations from time to time. Countries may set tariffs as a retaliation technique if they think that a trading partner has not played by the rules. For example, if France believes that the United States has allowed its wine producers to call its domestically produced sparkling wines ‘Champagne’ (a name specific to the Champagne region of France) for too long, it may levy a tariff on imported meat from the United States. If the U.S. agrees to crack down on the improper labeling, France is likely to stop its retaliation. Retaliation can also be employed if a trading partner goes against the government's foreign policy objectives. The benefits of tariffs are uneven. Because a tariff is a tax, the government will see increased revenue as imports enter the domestic market. Domestic industries also benefit from a reduction in competition, since import prices are artificially inflated. Unfortunately for consumers – both individual consumers and businesses – higher import prices mean higher prices for goods. If the price of steel is inflated due to tariffs, individual consumers pay more for products using steel, and businesses pay more for steel that they use to make goods. In short, tariffs and trade barriers tend to be pro-producer and anti-consumer. (by Brent Radcliffe) Exercise 11. Study the following chart. Fill in the missing parts using the dictionary.
Exercise 12. Work in pairs. What advantages and disadvantages of tariffs can you think of? Use the facts from the texts. Exercise 13. Prepare 10 – 15 questions covering the information of the texts. Types of the questions to be used: a) What is the (nature, difference, process, role, importance) of Customs payments? b) What role (function) do they play for the government, the consumer, the producer? etc. Exercise 14. Summarize Texts 1-2 using the following plan: 1. Types and definitions of Customs payments. 2. Goods which are exempt from Customs duties. 3. Protective role of tariffs. 4. Reasons of imposing tariffs. 5. Opponents and proponents of tariffs. 6. Tariffs as a retaliation technique. Exercise 15. Give arguments for (pro) and against (con) the following statements: 1. Protective tariffs are designed to provide a source of income for the federal government.
2. Revenue tariffs are aimed at protecting domestic production from foreign competition. 3. Specific duties are imposed according to the value of goods. Exercise 16. In pairs, discuss the following questions: 1. What is the difference between a tariff and protective tariff? 2. What is the significance of the protective tariff? 3. What is the purpose of a protective tariff?
Hints:
Exercise 17. Translate the following sentences paying attention to if – clauses: 1. They would have signed it, if they had been satisfied with the results of the test. 2. If we had known more about their culture, negotiating could have been easier. 3. If you had readthe paper, you would have seen the advertisement. 4. The passenger could use the green channel if he had nothing to declare. 5. If everybody had prepared for the meeting, we would have had a much more effective discussion. 6. Smuggling would occur if there were an imbalance in the supply and demand requirements for some particular goods. 7. If the Customs officer had made close examination of the commercial documents, he could have revealed the case of smuggling. 8. If a new case had been recorded, everyone who had been in contact with the person would have been vaccinated. 9. If the violation occurred, the merchandize would be seized by the Customs. 10. If the customer had called earlier, I would have told her to try your cell phone. Exercise 18. Fill in the gaps. 1. If you _______ the luggage claim receipt at once after arrival of the plane, you would have got your luggage. a) would show b) has shown c) had shown 2. If the passenger had filled in his declaration correctly, he ________any problems now. a) didn’t have b) wouldn’t have c) hadn’t 3. If they _________ reschedule the debt, they ______ bankrupt. a) hadn’t been able to, would have gone b) won’t be able to, will have gone c) wouldn’t be able to, would go 4. If he _________ through the declaration form, he ________ several mistakes. a) looks; finds b) looked; will find c) had looked; would have found 5. John would have taken a great risk if he _____________ his money in that business. a) invests b) invested c) had invested 6. If the sales _____________ poor, we ____________ the distribution network. a) were; will change b) have been; will have changed c) had been; would have changed 7. If all of the passengers had put on a life-jacket, a lot of them _______when the boat was capsized last week. a) wouldn’t die b) wouldn’t have died c) didn’t die 8. My sister’s train arrived ahead of schedule. If I hadn’t decided to go to the train station early, she _______ there for more than twenty minutes before I arrived. a) would wait b) wait c) would have waited 9. If you _____ a policeman, he ____ you the way. a) asked; will tell b) asks; tells c) had asked; would have told 10. They ______ their plane if they had not woken up late. a) would not missed b) did not missed c) would not have missed 11. If I had the opportunity, I think I ___________ one of those round-the-world air tickets. a) bought b) buy c) would buy 12. If the policyholder __________ the company before the expiry date, the company __________ to terminate the agreement. a) does not contact; shall be entitled b) didn’t contact; will be entitled c) wouldn’t contact; would have entitled.
Exercise 19. Finish sentences using the Subjunctive mood. 1. If there were no tariffs, … 2. If the government hadn’t imposed tariffs on oil, … 3. Unless the countries set tariffs, … 4. If there hadn’t been any benefits from tariffs, … 5. The payment of duties would be easier if… 6. Certain goods would be exempted from Customs duty if they… 7. If Customs tariffs hadn’t been developed, it… 8. If the Customs officer had had more time yesterday, he… 9. It is desirable that the information you obtained … 10. If he had not done well on the training course, he …. Exercise 20. Translate the sentences using Conditionals. 1. Если бы таможенник не проверил тщательно багаж пассажира из Амстердама в прошлый раз, предметы контрабанды не были бы найдены. 2. Я бы мог закончить работу вчера, если бы Вы мне помогли. 3. Вы бы получали все необходимые сведения, если обратились бы тогда в справочное бюро. 4. Если бы он тогда сдал последний экзамен, он бы поступил в университет. 5. Если бы пассажир правильно заполнил таможенную декларацию, он успел бы на самолет, который вылетел два часа назад.
GLOSSARY
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