EU, ASEAN and China Flashcards
The 4 key freedoms the EU Singles Market was built on are…
Free trade of goods- businesses can sell their products anywhere in the EU’s member states and consumers can buy where they want with no penalty
Mobility of labour- citizens of the EU can live, study and work on any other country to improve the mobility of labour
Free movement of capital- financial capital can flow freely between member states and EU citizens can use financial services e.g. insurance in any state
Free trade in services- professional services such as pensions and advertising should be offered in any state
Free trade of goods is and means…
A key freedom the EU Singles Market was build on
Businesses can sell their products anywhere in the EU’s member states and consumers can buy where they want with no penalty
Mobility of labour is and means…
A key freedom the EU Singles Market was built on
Citizens of the EU can live, study and work in any other country to improve mobility of labour
Free movement of capital is and means…
A key freedom the EU Singles Market was built on
Finically capital can flow freely between member states and EU citizens can use finically services e.g. insurance in any state
Free trade in services is and means…
A key freedom the EU Singles Market was built on
Professional services such as pensions and advertising can be offered in any state
Benefits of NOT being apart of the EU are…x7
UK businesses face less competition from EU businesses which means they may be able to increase sales to UK consumers
Not being involved in the free movement of capital reduces the possibility of a takeover bid from a EU rival
Limits migration from the EU which provides job vacancies for UK residents and slows the growth of house prices and rents
The UK can sign new trade deals with countries outside the EU e.g. Australia which helps the business grow
No obligation to pay to be a member e.g. CAP (common agriculture policy) which improves the balance of payments in the country.
Ability to change laws e.g. no longer have to comply with the Working Time Directive which means people can work longer which means companies can produce more. This improves the gross national product
Relieves pressure on public services e.g. NHS as borders are closed which improves quality of service received.
Costs of NOT bring apart of the EU are…x5
UK businesses exporting to the EU experience tariff and non-tariff barriers which increases unit costs and reduces their competitiveness in the EU
UK businesses don’t have free access to the EU Singles Market of 500 million consumers which reduces potential sales, profits and dividends
UK businesses aren’t able to appeal for EU grants or subsidies which means a valuable source of finance is lost
UK MNCs will find it more expensive to locate production in the EU which reduces their choice of location
UK businesses will find it difficult to recruit workers from the EU which means they’ll have to increase wages to UK workers to address the shortages of labour.
The effects of Brexit are… x4
Uk businesses e.g. construction, health care and hospitality have all face employment crisis since Brexit
Some UK businesses are locating branches in the EU to access EU customers more easily which means less business it taking place in the UK and less staff are being employed in the UK
Orders shipped by UK exporters are taking longer to process at customs delaying deliveries
The pound fell in value which increases th e cost of exports
ASEAN is the…
Association of Southeast Asian Nations and was established in 1967 in Bangkok with the signing of the ASEAN Declaration by 10 member countries.
Purpose and Aims of ASEAN… x7
To create free trading block for 10 countries. This means there are few restrictions between members which promotes trade
Free movement of workers between memes e states which prevents shortages and encourages flexible workforces. This improves standard of living and infrastructure.
Increase their exports and attracts FDI into their economies
Become an economic powerhouse which can compete in the global market
Political stability to attract FDI
Provide mutual aid in the form of training in tech, education and professions
Collaborate effectively for better utilisation of agricultures and industries to expand their trade
Costs of UK businesses trading with ASEAN/China are…x6
ASEAN/Chinese firms have lower prices and higher volumes which means UK businesses must reduce their prices in order to compete. This reduces profitability and risks bankruptcy/takeover from Asian competitors
Not as financially powerful which makes it difficult to expand into Asian markets. This reduces future growth which effects long-term profitability and stability.
Language differences when dealing with ASEAN/Chinese suppliers may mean the UK firms have to recruit staff with language skills which is expensive
Cultural differences can causes conflict and misunderstandings which reduces chance of success at international trade
Distance from Chinese/ASEAN suppliers increases transportation costs and lead times increase which means UK firms cannot respond quickly to customer needs.
Increased carbon footprint when trading with ASEAN/China gives UK firm bad reputation.
Benefits to UK businesses of trading with ASEAN/China are…x8
Component parts needed for UK production can be made cheaper in China/ASEAN which reduces costs to UK firms
Specialisation by ASEAN businesses can produce higher quality parts which increases quality of product manufactured in the UK
UK businesses can learn new production techniques that increase efficiency and competitiveness
UK firms who manufacture luxury products can sell to wealthy Asian consumers which increases profit for the year.
Potential access to 600million customers increases potential sales
Potential subsidies given to UK firms from UK government due to increase competition for ASEAN firms is a valuable source of finance
Increased brand awareness needs to increased demand for UK goods
UK firms can take advantage of cheaper labour due to low or no minimum wage which increases competitiveness in the global market
Reasons for the changes in the Chinese Manufacturing industry…x4
Chinese operations tend to pay lower wages than competitors which reduces costs. This makes them more competitive in the global market.
Due to the economic growth in China, the levels of disposable income have increased, which increases the demand for goods. This boosts production for Chinese firms
China has employed mega-tankers to transport exports thus reducing transport and unit costs
Increase in global demand has a positive impact on China’s production levels as many economies depend on Chinas materials and components.
A trade bloc is a…
Rule or agreement that reduces barriers to trade
Examples of trade blocs are…
EU, ASEAN, NAFTAS
