European Union: Case Study

Expense of Joining

To join the EU certain criteria must be met ie. high environmental protection standards a lot of investment may be needed to meet the standards

Trade Creation

Trade Creation means economic integration results in high-cost domestic producers being replaced by low-cost imports from efficient partner countries, consumers will see a price reduction

Reason why their growing?

Trade in Engine of Growth - Thus Living Standards Social improves Development

Loss of Resources

UK has to share traditional fishing ground this may damage this economic sector

Trade Diversion - also trade creation problem

occurs where lower cost external producers ie. NZ lamb is replaced by higher cost EU producers, increasing prices also Domestic job losses may be large if there is Trade creation. particularly true if large and structural (occu/geo immobile) unemployment is caused

Climate Action - 2 examples

Greenhouse gas emissions falling by 19% since 1990 while the EU economy grew by 45%. Renewable and energy efficiency 2020 targets are also within reach.

2 examples of Complexity of EU

Hard to adopt policies that suit all Hard to benefit every industry

EU 3 Social benefits

Increased Security Free Movement Subsidary Support

FDI

Firms outside the intergration area invest in new plants in member countries so they are able to produce output that avoids external tariff, increasing productive potential ie. Nissan, Japan built a factory in Sunderland, one of the most-effcient car producers in the world and they can export into EU market avoiding tariff barriers

5 Examples of Groupings

Free Trade Areas ie. NAFTA - No Internal Trade Barriers Customs Union - Mercosur + Common External Tariff Single Common Market + Factor and Asset Mobility Monetary Union - Euro + Common Currency Full Economic Union + Common Policy

3 Examples of integration in EU

Goods, Services, Money and People can freely move between states without barriers 17/28 Have a single currency - Euro Common laws + Policies ie. Common Agricultural policy + Common Fisheries Policy

80's-90's: Examples

Greece Spain Sweden

Political Benefit

Joining the EU gives countries a better platform to air their international concerns. Since member countries work together in dealing with important issues, it is likely that the international community will pay attention to the EU voice.

3 Social Reasons for Groupings

Legal Framworks, Employment Conditions (time and wages) Anti-Discrimination Law

5 Negatives of EU

Expense of Joining Trade Diversion Brain Drain Conflicting Policies Loss of Resources

3 Economic Pros of EU

FDI Price Transparency Trade Creation

When did UK join? + 2 others that year

1973 with Ireland and Denmark

How Many Countries?

28

2 Environmental Benefits

Air Quality Climate Action

1957 Original 6

Belgium France West Germany Italy Luxemberg Netherlands

2007

Bulgaria Romania

Groupings of Nations

Countries seeking to further their economic development have sought alliances to promote Cross-border trade also provides other benefits

2004

Cyprus Czech Republic Estonia Hungry Latvia Lithuania Malta Poland Slovakia Slovenia

Conflicting Policies

ECB sets IR which don't benefit all members

Air Quality

EU air quality legislation has meant the air we breathe today is better vs past decades

Free Movement

EU members are free to live and work where ever they like

Increased Security

EU-Counter Terrorism Policy - protects all member states from the threat of terrosim by introducing biometric passports to increase border security ie. Paris attackers caught in Belgium

Subsidary Support

Policies such as Common Agricultural Policy Protectionism - Subsidy - Tariff + Quota on agricultural produce EU farmers sell more thus more income increases their standard of living

3 issues for Future

Rise of Alt governments ie. Brexit Future impacts from ECB Migration

Brain Drain

Skilled workers emigrate East EU for West

Price Transparency

Where EU is adopted firms can easier compare prices helping to source cheap resources this encourages Cross-border trade increasing competition competition lowers prices, monopoly power and increases innovation

EU: Why?

help Europe recover after WW2 aimed to improve economic development by improving integration between nations