component 3 Flashcards

Question

what were the benefits to Uk businesses leaving the EU

Answer 1

-taking control on laws- before brexit the eu could pass laws that automatically applied in the UK even if British MPs voted against them. An example is fishing rights- Eu boats had the right to fish in UK waters under EU rules. After brexit the UK gov could decide who fishes in British waters directly benefiting UK fishing -immigration control- under free movement, the UK couldnt limit how many EU citizens came to live and work here. Some people in towns like Lincolnshire felt their local schools, GPs and housing was overwhelmed by rapid population growth. Brexit meant the government could manage numbers more carefully -freedom of Eu court rulings- the european court of justice had say on legal matters in the UK. An example that frustrated people was the inability to deport foreign criminals because the EU had human right laws to protect them. After Brexit, the UK supreme court became the final authority meaning british judges have the last word on law -cheaper goods from outside the EU-inside the EU the Uk had to charge tariffs( import taxs) on good from non-eu countries making goods like Australian goods more expensive. After Brexit, the UK could remove those tariffs meaning everyday goods in supermarkets had potential to become cheaper for shoppers -supporting developing countries- Inside the EU, trade deals had to benefit all 27 members making them slow and complicated. The UK can now make faster more targeted trade deals with poorer nations. For example the UK struck deals giving developing countries like those in Africa better access to British markets which is more flexible than EUs approach

Answer 2

selling to Europe becomes complicated- before brexit, a UK business could sell to any of the 28 countries as easily as selling within the UK itself with no extra paperwork, no custom checks, no delays. After brexit even sending a small parcel to France may include potential tariffs and VAT. For small businesses especially this made selling to Europe more difficult that many simply gave up on their biggest export market entirely losing skilled workers overnight- businesses in construction, healthcare, tec and hospitality relied on being able to hire freely from 450million Europeans. A restaurant owner in London could easiily hire and experienced Italian chef or a building firm could bring in Polish builders for busy periods. After brexit this stopped with businesses facing a recruitment crisis, rising wage bills and in some cases had to reduce opening hours or take on fewer contracts because they didnt have enough staff. investment dried up- large international companies- particularly in finance and manufacturing set up their European headquaters in the Uk because it gave them access to the entire EU market. After brexit, company like JP morgan moved thousands of jobs to Paris and Dublin. Car manufactures like Ford closed or scaled back UK operations, costing British workers their jobs the pound weakened- immediately after the 2016 referendum result, the pound dropped sharply in value. For businesses that import raw material or components abroad( most manufactures) their costs shot up overnight facing much higher bills squeezing their profit margins with no warning red tape- Inside the EU, businesses followed one set of rules. Outside it, they now had to comply with both UK regulations and seperate EU regulations if they wanted to continue trading with Europe. This effectively doubled the administrative burden for any business operating across both markets, costing time and money that smaller businesses simply cant afford

Answer 3

international trade consists of buying and selling of exports and imports between countries

Answer 4

-countries dont produce all their own goods and they want to satisfy the needs and wants of their population. different countries specialise in different goods in which they are most efficient then they can sell any surplus they produce for example Saudi Arabia and oil. Allows for increased efficiency and product differntation.

Answer 5

free trade means international trade conducted without the existence of barriers to trade such as tariffs and quotas. The members of a free trade area dont have common external tariffs on goods entering that area. A single market is like a free trade area but where free movement can also occur

Answer 6

-consumer expectations -WTO removing barriers -technological changes -The falling costs of transporting goods -Cross border deregulation- trading blocs making trading easier

Answer 7

-economies of scale occur -increase choice for consumers -increasing competion improving quality and reducing prices -increases chances of transfer of skills aiding development -increases political stability through relationships -encoruages innovation for developing countries specifically: -brings employmenty and higher wages -encourages inward investment

Answer 8

an economic policy of restraining trade between countries through the imposition of barriers to trade such as tariffs or quotas. Despite the free trade advantages some countries still use policies of protectionism to: +protect domestic industries. industries that have high start up costs wont be able to compete against a foreign high volume producer. -However industries protected by trade barriers lack the competive barrier limiting efficiency, perhaps governments can prodivde subsidies or grants. +to protect domestic employment. Preventing those imports which consumers are likely to purchase can preserve jobs.- however, consumers are likely to have less choice and higher prices. Foreign countries can also retaliate by imposing trade restrictions on exports in result +to prevent dumping. This is the practice of selling goods at less than cost price making a loss to drive domestic producers out of business. Once they have achieved this then they can raise prices and enjoy monopoly profits. -However this can stop consumers from being able to buy cheaper goods.

Answer 9

-tariffs -quotas -voluntary export restraint (VER) -Non-competitve purchasing by the governments -Embargos

Answer 10

these are taxs on imported goods and can be reffered to as custom duties. They are used by the government to increase revenue however most often they are used to restrict imports. By imposing a tax on a good it is likely that the final price to the consumer will rise. A rise in price will cause a fall in demand and the volume of imports will fall therefore more people will be encouraged to purchase domestically.

Answer 11

a quota is a physical limit on the quantity of good imported. This will increase the market share of market available for domestic producersand raise the price of the protected product

Answer 12

a type of quota put in place by exporters. Often created if exporting countries want to impose their own restrictions rather than risk sustaining worse tariffs or quotas

Answer 13

involves a government only buying from domestic producers even if it means paying higher prices

Answer 14

involves complete or partial prohibition of trade with a particular country to isolate it

Answer 15

cultural differences. Marketing history is full with examples of businesses who ignored cultural differences at there costs like the leading Scandinavian soft drink Pschitt in the UK( the name has a silent p) There are also other influencing factors like: factors economic- The home market means a business doesn't have to worry about currency at all -prices and profits stay stable. In an international market, exchange rates can change, so the business might suddenly make less money even if sales stay the same. cultural- At home, a business already knows how to talk to its customers and understands what they want. Abroad, language barriers and different buying habits mean the business might get its marketing completely wrong. tech At home, products can be sold exactly as they are. In an international market, products might need to be changed to meet different standards, which costs extra money and takes more time. legal At home, a business knows the rules and can follow them easily. Abroad, the laws are completely different and there can be a lot of red tape, which makes it harder and slower to operate. demographic At home, a business knows who its customers are — their age, spending habits, and so on. In an international market, the business doesn't have this knowledge, so it's harder to aim products at the right people. marketing and competition At home, people already know the brand and the business has its delivery and distribution sorted. Abroad, nobody knows the brand yet, so the business has to spend a lot more on advertising, and it doesn't know who its competitors are or how strong they are.

component 3 Flashcards

(40 cards)