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

Becoming part of Trading Blocs.

Extracts from this document...

Introduction

Peter Hill Introduction to International Business, Year 1, Level 4 Luiz Montanheiro Becoming part of Trading Blocs Trading blocs are suggested to be an efficient way to create a sustainable economic growth. This will now be explained, giving detail as to the advantages and disadvantages to countries when becoming part of trading blocs. Referencing will be used throughout; illustrating where the relevant information has been found, as well as a Bibliography, which will lead into further detail about the research gathered. On a global scale, organisations like the World Trade Organisation, (also known as the WTO) aim to free up world trade from any trade barriers. These trade barriers are also trying to be lowered on a more regional scale, by groups of countries, which can also be looked at as Trade Blocs. This is being done so that regional trade can be stimulated. The regional co-operation is seen to be a very important cause of the economic growth for the reason that trade is being created. Some of the larger trading blocs can be recognised as, NAFTA (North American Free Trade Area) ...read more.

Middle

This can also be bad however, for the simple reason that the company (as previously stated), will become uncompetitive in the internal market. This has a disadvantage to the country as home-grown companies are failing to succeed in their domestic markets, in some cases being left failing to survive. Before entering a trade bloc, a country has to weigh up the pros and cons between, the disadvantage of the costs of opening its own market to more foreign competition and the advantages that would be gained from getting better access to the blocs preferred market. The gain of this access would always be greater than any disadvantage, so countries would always put forward an application for an existing bloc. The member countries of the bloc have got to consider their personal advantages against their disadvantages of the acceptance or rejection of the new member. When deciding this, the gains from getting access to the new members market are compared with the losses from sharing its original market with the proposed new member. If the bloc in talks with the prospective new member is small, then the benefits will outweigh the disadvantages therefore are willing to accept the new country for membership. ...read more.

Conclusion

There is also an argument, which recommends that we should join it. This is to help attract more investment and customers from elsewhere. This is going to be easier if we are doing business in their currency and not if we're asking them to use our fluctuating exchange rate. In conclusion, there are both negative and positive effects on countries when joining a trading bloc. These points have been put forward, with the use of examples to strengthen the theory. Before becoming a member, both, the member countries and the actual country in hand has got to weigh the pros and cons to find out as to what is going to be most beneficial to them, in relation to what each are going to get out of the situation. This may take a long time, and the waiting list may be between a few countries at any given period. At this moment in time, Turkey is waiting to see if they are going to become the most recent member of the EU. I feel that overall, a country hasn't got anything to lose when wanting to join a trading bloc as the benefits would be much greater than if they decided against it. ...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. A clear explanation of key underpinning economic theories relevant to the EU.

    as prayer times and religious meetings and rituals a company must consider these when launching products as it can offend some religions. Aesthetic consideration, this is regarded as things which are beautiful or of a good taste. This could include branding, visual appearance, colouring or shape a firm must consider

  2. What does citizenship mean in the European context?

    Thus, nationality constitutes the state (hence nation-state) which in turn constitutes its political boundary. The significance of the political boundary is not only to the older notion of political independence and territorial integrity, but also to the very democratic nature of the polity. A parliament is, on this view, an institution of democracy not only because it

  1. "Analyse and compare the gains predicted by economic theory from theremoval of (a) tariff ...

    in order to create an economy within which member countries can experience remarkable gains from trade as well as being able to compete with the likes of United States and countries such as Japan in Asia. The move to establish a Single European Market (SEM)

  2. Road freight transport - Paying its way?

    Congestion costs arise due to the fact that additional vehicles reduce the speed of the other vehicles and hence increase their journey time. This is a cost to the logistics industry, indeed, research undertaken by the Freight Transport Association shows that congestion creates serious problems with planning and scheduling freight

  1. Cyprus a new member of the European Union, a discussion of the advantages and ...

    Five days later Turkey using the coup as a reason, invaded Cyprus, with a pretext of restoring the constitutional order. ("About Cyprus", 2001) The results of the Turkish invasion are: * 37% of the island is under Turkish military occupation.

  2. Can the euro challenge the dollar as the world's international currency?

    Population: with 300 million inhabitants the eurozone is larger than the United States. Economy: Together the EMU countries boast a gross domestic product (GDP) of more than $6, 490 bn, a bit smaller than the US GDP of $7,610bn. Exports: In international trading the euro zone comes out on top,

  1. Should Britain join the Euro? A report into the pro's and cons.

    > 1975- In the British House of Commons, 369 members voted in favour of the United Kingdom staying in the Community with 170 voting against it. > 1999- The Euro came into circulation in 1999 when eleven member countries began to put it into practice.

  2. European Single Currency.

    * The Library * Economics Books * TV * The News * Encyclopaedias The exact sources I used will be in my bibliography. Hypothesis I think that the UK will be affected by the Euro enormously as more and more of UK business takes place between the EU and less and less between the rest of the world.

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