Learning Objectives（教学目标）

After completing this unit, students should be able to:

—use basic vocabulary and expressions related to business negotiations;

—identify basic procedures when negotiating;

—utilise negotiating skills to:

• start a negotiation;

• express agreement and disagreement;

• accept and reject a requirement;

• negotiate prices, discounts and commission;

• strike a deal.

Lead In

Trade Terms and Commodity Price 

As one of the most important essences in international trade, the issue of commodity price should be carefully considered. Being directly connected with the profit of a foreign trade deal, price definitely arises most consideration and discussion from both parties involved in a trade contract, which also means price could be a focus in negotiation.

A unit price consists of four parts, namely, currency unit, unit price figure, measuring unit and price terms. For instance, "USD100.00/MT, FOB Shanghai", USD is the currency unit, 100.00 is the price figure for each measuring unit of the commodity concerned, while MT, the abbreviation of Metric Ton, is the measuring unit, and FOB Shanghai is the trade term, which indicates the division of the relevant costs (e.g., freight, insurance), risks and obligation between the parties involved in the transaction.

Trade terms, also called price terms or delivery terms, are an important component of a unit price in international trade, standing for specific obligations of the buyer and the seller. Every commercial transaction is based upon a sales contract, and the trade terms used in the contract have the important function of naming the exact point at which the ownership of the merchandise is transferred from the seller to the buyer. The use of the trade terms greatly simplifies the contract negotiations, and thus saves time and cost.