1.3 Brexit Means Flashcards
Give three examples of a world trade bloc
NAFTA CARICOM COMESA EU MERCOSUR ASEAN
How many member states does the Eu have?
28
Why participate in a trade block?
Countries want FDI
Why is FDI important?
FDI brings capital / money into the country.
FDI creates jobs, income and increases both taxes and
spending power for workers.
FDI means infrastructure – and other British companies benefit
Problem of being in a trade block? Hint to do with businesses
Too much competition for British companies can shut them
down.
What is FDI?
Ownership of a business in one
country by an organisation that is
based in another, making it legal
for foreigners to own and control
businesses and property in
another country.
What is Inorganic and organic FDI? Give examples for each
Sometimes it’s inorganic – e.g.
BA buying Vueling, and can lead
to job losses
Sometimes it’s organic –
expanding operations into a new
country, e.g. Nissan into
Sunderland, creating jobs as well
as a larger supply chain.
If there is free trade in place then it usually means there is no….
Tariffs
Why would countries not want FDI?
Imports threaten industries.
Migrants create cultural diversity
so countries protect themselves
from FDI.
What is offshoring ? And why do it?
Practice of basing some of a companies processes or services overseas. They do it to take advantage of lower costs
What is transfer pricing ?
Channeling profits through a subsidiary company in a low tax country like Ireland
Give an example of a foreign acquisition?
UK’s Cadbury was taken over by USA giant Kraft
What is an foreign merger?
Two firms in different countries join forces on create a single entity.
What does ASEAN stand for ? What do they do?
ASEAN
The Association of South East Asian Nations has 10 member states with a total of 6 million people.
This has promoted free trade and helped develop
manufacturing and created jobs
What is privatisation ?
The transfer of business or industry or service from public to private ownership
