single market Flashcards
1
Q
A single market involves
A
- No Tariffs on trade between member states
- Elimination of border controls
- Free movement of People
- Mutual recognition of qualifications
- Harmonization of taxes and other industrial and economic laws
2
Q
Benefits of a single market
A
- Trade Creation. Exploitation of comparative adv allows lower prices and costs. Leading to higher output and more employment
- Reduction in the direct costs of barriers
- Economies of scale from specialization
- Greater competition
3
Q
Costs of a single market
A
- Structural Change due to increased specialization
- Adverse Regional multiplier effects. The creation of a single market tends to attract capital and jobs away from the periphery areas to the centre.
- Development of Monopoly/ Oligopoly power
- Trade Diversion. If external barriers remain high countries could lose out
4
Q
Obstacles To Completing the Single Market in the EU
A
- Customs Formalities
- Different Tax Rates, especially on Alcohol and tobacco
- State Subsidies to domestic industries, or tax breaks to encourage inward investment. This creates unfair competition within the EU
- Different regulations added to the cost of business
- Different currencies (until the Euro was launched)
- Until 1994 there were restrictions on the movement of capital, but these controls have been abolished and gradual liberalization has been made on other aspects of financial services.
