THE EU AND BREXIT Flashcards
What is the European union (EU)
The European Union (EU) is a single market comprising 28 member states who cooperate on an economic and political basis.
In other words there are 28 member states who cooperate for economic and political benefits.
What are Business benefits of EU membership
Free trade means tariff free access to all member states for UK companies (market size 500 million consumers)
Benefits from economies of scale (as if you can increase sales, then you can reduce the price per unit which reduces the production costs)
Free movement of people allows for recruitment from across Europe, increasing skills available (When the UK were not apart of the European union if they wanted to employ someone from Europe they would have to get that person Visa - But when the UK are apart of the UK they wouldn’t have to apply for a Visa, which saves time and money - The same goes the other way - It can also reduce costs for businesses, as employees from poorer countries may not mind having minimum wage in the UK)
Tariff free access to specialist suppliers (Raw materials from the EU can be imported without any additional taxes or restrictions)
What are Business costs of EU memberships
Time and money to adhere to EU regulations (adhering to product standards and specifications)
Common trade laws with non - EU members (businesses won’t be able to buy and sell to and from countries outside of the EU without additional taxes and restrictions)
Increase competition for UK businesses
Increased costs to sell to EU countries (need for market research, accounting for linguistic and cultural differences)
What is the single market
The UK is a single market, which means that there is no difficulty for someone to manufacture something in London and sell it in Manchester, Cornwall, Newcastle or anywhere else in the UK. Previously in the past when the UK were not apart of the EU if you had a bike in the UK and wanted to sell it to someone in any of the 28 countries in Europe then you may of had a tariff imposed on that bike (tariff = a tax or duty to be paid on a particular class of imports or exports) Which means that the government of whichever country you sold it to would add a TAX on top of the price of the bike. There also may be restrictions of how many bikes you can sell in the EU or to that country, these are all forms of protectionism. What free trade means is that we don’t have any forms of protectionism, which means that you can sell the item in a certain area without any additional taxes or restrictions. Being a member of the EU means that there are no tariffs or restrictions on the products that you sell in the EU.
What is free trade
Means that there are no additional taxes or restrictions for selling a product in a certain area.
What are the opportunities from leavingn the EU
Increase sales to non - EU countries (i.e China, India, Brazil)
Reduction in value of sterling makes exports cheaper
What are the threats of leaving the EU
