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I. Reading Practice Text A Introduction Nowadays, we talk more and more about foreign trade. Then, do you know what foreign trade is, the reason why we need to increase foreign trade and the benefits of foreign trade. Now you may read the text to find out the answer. What is Foreign Trade? If you walk into a supermarket and you are able to buy South American bananas, Brazilian coffee and a bottle of South African wine, you are experiencing the effects of foreign trade. Foreign trade allows us to expand our markets for both goods and services that otherwise may not have been available to us. It is the reason why you can pick between a Japanese, German and American car. As a result of foreign trade, the market contains greater competition and therefore more competitive prices, which bring a cheaper product home to the consumer. Definition of Foreign Trade Foreign trade is the exchange of goods and services between countries. This type of trade gives rise to a world economy, in which prices, or supply and demand, affect and are affected by global events. Political change in Asia, for example, could result in an increase in the cost of labor, thereby increasing the manufacturing costs for an American sneaker company based in Malaysia, which would then result in an increase in the price that you have to pay to buy the tennis shoes at your local mall. A decrease in the cost of labor, on the other hand, would result in you having to pay less for your new shoes. Trading globally gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries. Almost every kind of product can be found on the international market: food, clothes, spare parts, oil, jewelry, wine, stocks, currencies and water. Services are also traded: tourism, banking, consulting and transportation. A product that is sold to the global market is an export, and a product that is bought from the global market is an import. Imports and
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