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EU Business Innovation > Exam > Flashcards

Exam Flashcards

1
Q

How to measure regional integration?

A
  1. Price convergence
  2. Growth of trade in border
  3. Productivity gains
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2
Q

What is the 2004 Bolkestein directive?

A

Mutual recognition applied to services, but ended up causing more damage and heavily critisized

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3
Q

What are national preferences?

A

The natural tendency of consumers to buy products from their nation instead of another country

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4
Q

What is social dumping?

A

When employers use cheaper labor than what is available at their site of production (often foreing workers)

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5
Q

What are the SM limits?

A

Over-dominance of SME’s and resilience of national preferences

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6
Q

What is dumping?

A

When manufactures sell their products below market price (even below their own market’s price) to create a monopolistic situation and then rise their prices to make more profit (abuse of dominant position and unfair competition)

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7
Q

What preceded the creation of the WTO?

A

Signature of the GATT in 1947

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8
Q

Why was the GATT created?

A

To avoid a return to protectionism after WWII and to meet US competition

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9
Q

How can a standard become an international standard?

A

When they are widely used on a large market, part of the first mover advantage

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10
Q

Why are harmonized standards not used enough?

A

They are a long and costly process, sometimes they become obsolete when the market evolves too quickly and the use of harmonized standards is voluntary

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11
Q

What is the result of the lack of harmonized standards?

A

Rise of non-compliant products and distortion of market (because of high R+D costs)

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12
Q

What are the main objectives of the GATT/WTO?

A

Trade openeness, lowering trade barriers and reduce custom duties towards the GATT communities

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13
Q

What are the 3 main principles of the WTO?

A
  1. Most favored nation
  2. Reciprocity
  3. National Treatment
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14
Q

What is the most favored nation principle?

A

No discrimination between trade partners, they all get the same perks

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15
Q

What is the Reciprocity principle?

A

If you beneting from a tariff reduction you should reciprocate it in return

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16
Q

What is National Treatment principle?

A

IMported goods should be treated as good as one’s own goods

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17
Q

Why is VAT an obstacle to movement of goods?

A
  1. Distortion of competition induced by tax differentials on the market
  2. Management costs
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18
Q

Why is VAT harmonization a touchy subject?

A

Because any changes have to be voted unanimously, which never occurs. Differences in taxation come from differences in income and the distribution of public spending

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19
Q

True or False: quotas are prohibited under the WTO?

A

True, theyr are unless:
1. In Agriculture
2. Against sanctioned country
3. With non-members of WTO

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20
Q

How did the EU unify the service market?

A

They targeted Network-based services (like telecom and electricity) and institutionalizing them to allow public authorities to intervene

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21
Q

What is a natural monopoly?

A

Since they require high-cost infrastructures, operaters must have acess to the whole market to be able to make profit, so there is not enough place for 2 companies

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22
Q

What are universal service obligations?

A

Services that contribute to society as a whole, regardless of profitability (ex:water and electricity)

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23
Q

Who do we call the “Frugals” countries?

A

Sweden, Denmark, Austria and the Netherlands

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24
Q

What are the 7 professions that benefit from MR?

A
  1. Nurses
  2. Physicians
  3. Midwives
  4. Architects
  5. Veterinarians
  6. Dentists
  7. Pharmacists
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25
Q

Name existing barriers to the movement of labour.

A
  1. Family ties
  2. Language
  3. Institutional barriers
  4. Culture
  5. Work permit
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26
Q

What is the EU budget composed of?

A
  1. % of Member States’ GNI
  2. VAT
  3. Traditional own resources (customs duties)
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27
Q

What does the EU budget equivalates to?

A

1% of EU’s GDP and 2,5% of public expenditures

28
Q

Why are EU’s expenses getting bigger?

A

More area of intervention and lowered customs duties due to trade agreements into the EU

29
Q

What is the notion of fair return?

A

When states consider that the benefits it derives from EU budget must be equivalent to its contribution to the budget

30
Q

What are the issues of the SM today

A

Governance (EU law implementation and inforcement)
Loopholes impl. SM
New challenges (technological and environmental)

31
Q

How to remove technical barriers to the SM?

A
  1. Emphasize mutual recognition of national regulations or standards
  2. Develop harmonized standards
32
Q

What are some fiscal barriers?

A

VAT (consumption tax on goods and services)
- MS full prerogative (vote anonimous)
- Contribution to MS GDP

tax comp

33
Q

What are some legal barriers in the SM?

A

Cross-borders transaction- national law
Dispute settlement

34
Q

How to institutionalize a Network-based service?

A
  • Opening the market to competition and granting licenses
  • Ensuring interoparabilty (standards)
  • Promoting development transnational netwroks
  • Name an independant autority to regulate the market
35
Q

What are some tumbling blocks of the european telecommunication system?

A

_ Too much state interference
- Funded (national budget)

36
Q

Why was the common market created?

A
  • Create economies of scale
  • Productivity gains
  • Motivated by the competition of the USA
37
Q

What is the national champion strategy?

A

When the State encourages a company by protecting it from competition to advance the interests of the nation (form of protectionism)

38
Q

What is the Eurosclerosis?

A

A diminution in 1970 of economic growth caused by the rise of USA and Japan economies

39
Q

What legislations helped to create the modern SM?

A
  1. 1985 White Paper of Jacques Delors
  2. 1986 European Single Act
  3. 1993 Treaty of Maastricht
40
Q

Why is the over-dominance of SME’s a limit to the SM?

A

Because they don’t engage in cross-border trade, they do not have the resources or budget to compete against big companies

41
Q

What are some exceptions to the mutual recognition principle?

A
  1. Security
  2. Health
  3. Environment
  4. Consumer Protection
42
Q

What are VAT differentials?

A

A way for governments to subsidize less competitive national champions

43
Q

What are the 3 types of services?

A
  1. Tradable
  2. Regulated
  3. Net-work based
44
Q

What happened in 2017 in service sector?

A

The European Commission made it mandatory for MS to notify any new national standard that could restrict cross-border trade in services

45
Q

What is the subsidiarity principle?

A

It is to regulate the exercise of the Union’s non-exclusive powers. It rules out Union intervention when an issue can be dealt with effectively by Member States themselves at national level. The Union is justified in exercising its powers only when Member States are unable to achieve the objectives of a proposed action.

46
Q

What is the goal of the Multiannual Financial Framework?

A

Defines main budgetary priorities, delimits total and anual ceiling of expenditure to be committed (every 7 years)

47
Q

What is the CCP?

A

The EU’s Common Commercial Policy

48
Q

What are the 3 prohibited pratices of the WTO?

A
  1. Prohibition of dumping
  2. Prohibition of quantitative restrictions
  3. Prohibition of export subsidies
49
Q

What are some EU Trade policy tools?

A
  1. Common external tariff
  2. Quotas (in exceptional cases)
  3. Trade preference system (MFN, trade free agreements)
50
Q

Why is Eu’s relation with USA fundamental?

A

Because many european products need American technology

51
Q

How can you describe the USA_EU relation?

A

They are two strong economies with low trade barriers and technically advanced firms that want to maintain their dominant position against national champions from emergent countries. They want those to open their markets so that they can compete with their national champions

52
Q

What is the main point of disagreement between USA and EU?

A

Agriculture, because they both strongly support their national producers. USA want EU to open more their agricultural market but the EU does not want since the USA are subsidizing a lot this sector, which makes their products less expensive than EU (who has floor prices because of the CAP) and ends up taxing USA products a lot so that european products become less expensive.

53
Q

What does the acronym TTIP stands for?

A

Transatlantic Trade & Investment Partnership

54
Q

What is the TTIP?

A

It is the trading agreement between the
European Union and the United States.

55
Q

What is the goal of the TTIP?

A

To boost transatlantic trade and investment,
which is projected to drive growth and create jobs on both sides of the Atlantic.

56
Q

What was the most important effect of the TTIP?

A

The ability to impose transatlantic standards in the world, particularly in emerging countries, while the balance favor is still in favor of Western countries. Setting rules for most economically advanced countries to set them even more appart.

57
Q

Biggest critique of TTIP?

A

“The West aginst the rest”: testifies that rich countries can’t accept multilateralism since they can’t control it.

58
Q

Why did the TTIP fail?

A

Lack of harmonization, lack of transparency in negociations ( a lot of lobbying)

59
Q

What are the benefits of CETA?

A

Canada: quotas of wheat, beef , pork and corn
EU: quotas of Cheese and more imports

60
Q

Sources tensions with China?

A
  1. Deficit in trade balance from EU
  2. Underevaluation of Chinese currency
  3. Too much states intervention (creates too much distortion)
  4. Hard to access the market
  5. Lack in protection of intellectual intelligence
61
Q

What is the goal of EU Competition Policy?

A

Protecting market mechanism from breaking down and disorts single market

62
Q

What is the Competition Policy based on?

A

Anchored in free-market capitalism ideology, no state intervention, companies are private, individuals control supply and demand

63
Q

What are the 2 objectives of the Competition Policy?

A
  1. Prevent players from erecting barriers
  2. Counterbalance too much effectiveness of national champion that would become too big (and disort market)
64
Q

What are the 3 main tasks of the EU Competition Policy?

A
  1. Control anti-competitive practices
  2. Control state aid
  3. control mergers
65
Q

What is market power?

A

When group of firms place prices way above production costs

66
Q

Market dominance?

A

When a company has more than 70% of shares and is so strong it can act independantly from competition

EU Business Innovation (1 decks)

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