Economic Unions Flashcards
Customs union
A free trade area between two or more countries with a common external tariff applied to all outside countries
Free trade area
Trade without barriers, such as tariffs, between two or more countries
Single European market
Free movement of goods and services
Free movement of workers and capital
Common product standards and regulations (members must have sales tax such as a VAT of at least 15%)
A common external tariff on imports into the EU
EU membership for the U.K.
Joined in 1973
Reasons for leaving the EU
Greater threat to the competitiveness of domestic business, especially those with lower wage costs in poorer EU countries
Trade diversion- this occurs because, for example the U.K. Cannot buy goods tariff free from non EU members and as a result may have to buy from higher cost suppliers from within the EU
The financial contribution made to the EU budget (£9 billion a year )
Wages may be forced downward la due to competition for jobs from poorer countries
Need to comply with rules and regs which may impose more costs on firms
Decisions taken by the EU may go against the economic and political interests of the uk
Arguments for remaining an EU member
Wider choice for consumers, who are presented with a greater variety of goods and should benefit from greater price competition
Wider markets for businesses to aim their products at (EU pop at around 500 million)
Potential economies of scale gained by selling to more people
Trade creation- the benefits of being able to buy products tariff free which would not be possible if not for the EU
Access for firms to have a greater supply of labour
The world trade organisation (WTO)
WTO attempts to promote trade liberalisation and the reduction of trade barriers that exist between its members
Trade liberalisation (trade without barriers or with reductions in trade barriers)
