• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

"Analyse and compare the gains predicted by economic theory from theremoval of (a) tariff barriers (b) non-tariff barriers wi

Extracts from this document...

Introduction

"Analyse and compare the gains predicted by economic theory from the removal of (a) tariff barriers (b) non-tariff barriers within the Single European Market" Autumn Term: Vanessa Fry EC 329 Economics of the European Union 2004 By: Partthepan Shivacanthan BSc Economics In this essay I have been asked to analyse and compare the gains predicted by the economic theory from the removal of tariff barriers and non-tariff barriers within the Single European Market. In order to answer this question we must first have an understanding of the history and the purpose of the Single European Market and why measures such as tariff and non-tariff barriers play a major role when talking about trade. The creation of the European Union was seen as a major stepping stone towards creating a united "super power"; within which there was political harmony, economic stability and social co-operation between its member countries. The moves to complete the Single European Market (SEM) and the progress towards an economic union focused attention on the European Union; who was seen as a key player in the process of European integration. It all dates back to 1952, where the foundations were laid of a European Community when the Treaty of Paris created the European Coal and steel community (ECSC) ...read more.

Middle

Though quotas (NTBs') impose a limit on international goods and increase the market share for domestic firms; it leads to rising prices on their goods and services within the affected member country to make up for the potential earnings that are lost through the restriction to cover their costs. Smaller countries in particular suffer and become victims due to the implementation of policies such as these. In order to eradicate this problem the EC created the Customs Union which is an area of free trade with common external tariff (Imports into the customs union pay the same level of tariff regardless of point of entry). Though it doesn't mean the complete removal of tariffs and non-tariff barriers but an area were the costs are reduced and goods can be traded without any sort of restriction. A good example of this would be the "Cassis de Dijon"II case which established the principle of mutual recognition. In this the European Court of Justice (ECJ) ruled that Germany were not entitled to ban the importation of Cassis de Dijon, an alcoholic drink from France, on the grounds that it did not conform to the German rules and regulations governing the sale of the product. It went on to saying that products or services that adhered to the national rules and regulations in the member country where they were produced should ...read more.

Conclusion

If the production factors in the union are not fully occupied, protection can turn local demand towards domestic goods so that more labour is put into work hence social costs can be avoided. We can also ease our balance of payment problems by staying out of the EU. Import restrictions reduce the amount to be paid abroad, which helps to avoid adjustments of the industrial structure and accompanying social costs and societal friction in form of wage reduction and so on. Despite of all the reasons mentioned above we cannot deny the importance of the removal of the barriers in the single market. Too much nurturing of firms from competition with other member countries result in them becoming inefficient and a decrease in production levels. All in all the single market is in the process of becoming a huge market for the European businesses and therefore all forms of barriers should be removed in an attempt to aid them. Another benefit according to the theory of trade is product differentiation. Once the barriers are removed trades can take place between the different markets within the member countries. It is believed (according to the theory) that the endowments of inputs of the various markets would be identical. But this contradicts with the theory of comparative advantage; saying that consumers prefer a wider choice of goods and services which will make them better off. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level European Union section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level European Union essays

  1. C1 Analyse the factor, which contribute towards an effective team.

    If we did our jobs as told we would have met our targets. As communication was lacking and members were demotivated no one was taking responsible for any problems occurring. The problems were we had competitors and the team leaders didn't take any action.

  2. The Institutional Consequences of Domestic Politics on Africa's International Relations and Regional Cooperation.

    In Nigeria, for instance, intra-ethnic conflicts have been more violent oriented than inter-ethnic conflicts. There are the cases of Ifes and Modakekes, Oyo and Ogbomoso all of Yoruba extraction, the Umuleri and Aguleri Conflict of Igbo extraction. It is the same story across the Middle belt region.

  1. What does citizenship mean in the European context?

    own Member State has no representation as if reciprocal arrangements are not already in place as any seasoned traveler will know; and the right of non-residents to vote for the European Parliament or local authorities? Does not Article 8 look awfully like one of those Carnets of "free attractions" some

  2. The Institution of the European Union and Theories.

    This is the result of The Treaty of Rome. *Some UK businesses may be liable to hostile take-overs by larger European businesses intent on dominating the new European market. *Boots has to consider the marketing of its products carefully as it operates in the single market and their are many

  1. Disneyland Resort Paris, Case Study

    i.e. * Design future theme hotels with themes that are "more European," yet Disney-like -> instead of having Yellow Stone as theme, having Pinocchio's Italian village as topic. * Sell merchandise that is proved to be favored by Europeans. IV. Find ways to better deal and motivate French employees - as

  2. To what extent does the experience of European integration confirm the conclusions of theory ...

    This is just one advantage of cooperation. Benefits may also accrue to countries that liberalize labor and capital movements across borders, who coordinate fiscal policies and resource allocation towards agriculture and other sectors and who coordinate their monetary policies. There are various levels in economic integration; normally they are partitioned into 5 levels: FTA (e.g.

  1. The Importance of the Cyprus Issue in terms of the Accomplishment of the ESDP

    Cyprus was not then a prospective member of the EEC, nor was it the significant economic regional player in the Eastern Mediterrenean that it subsequently became. At that stage Cyprus had not seriously contemplated membership of the club of Europe; indeed it was not even a twinkle in the eyes

  2. The EU automotive industry currently faces a number of issues. It lags behind the ...

    It is not only Western European carmakers such as Peugeot and Citro´┐Żn that are relocating to Eastern Europe, but also foreign companies such as Toyota and Hyundai (both of which originally possessed production plants in Western Europe). 3. Effects on Business There are both positive and negative affects that relocation can have on businesses.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work