- Countries specialise in goods being produced which have a comparative advantage (e.g. can produce at the lowest cost) and trade these products for other members' specialisms.
- Firms producing a country's specialisation become TNCs as they sell outputs through the bloc.
- A single market trade bloc composed of 28 members and a population of 512 million.
- It guarantees the free movement of goods, capital and people.
- The Schengen area countries (26) have removed barrier controls.
- A single currency, the euro, has been adopted by 19 members.
- Uniform product labour and environment regulations.
- Integrated economic policy areas, e.g. Common Agricultural Policy, Structural Funds to assist regions within member countries with a GDP per capita of less than 75% the EU average.
- The founding Treaty of Rome in 1957 committed members to work towards an 'ever closer union'
- Political globalisation with the European Parliament and some foreign policy determined at EU level
- The original political aim was to integrate economies, so that interdependence prevents war.
- A free trade area with 10 members with a population of 625 million
- A uniform low tariff is applied between members for specified goods. It's working towards the elimination of tariffs sector by sector.
- Agreed to create a single market by 2015, however this was not achieved.
- Political globalisation: ASEAN aims to co-ordinate response to regional political issues. It's more political than economic.
- ASEAN pledged to remain nuclear weapons free in 1995.
- 'ASEAN way incorporates a culture specific approach to conflict resolution. Seeks consensus and avoids public criticism of member nations.
- e.g. ASEAN members won't comment on Burma's internal policies
- This involves promoting free markets and reduces government intervention in the economy
- Competition between firms leads to innovation and lowest cost production
- Outcome is higher output, lower prices and greater choice - higher SOL
- It was initially promoted in the 1980's by UK Prime Minister Margaret Thatcher and US President Ronald Reagan.
- It means ending the monopoly provision of some services like telephones, broadband, gas and electricity, so you can choose your supplier based on quality and price.
- It has created competition in once restricted markets.
- It involves removing price controls, breaking up monopolies (e.g. trade union monopolies of labour supply) and encouraging competition - including foreign competition, which increases efficiency further and promotes globalisation.
- Foreign competition can be encouraged by removing legal restrictions on foreign ownership and removing capital controls, allowing inflows of FDI (and outflows)
- Since the 1980s many governments have sold of industries they once owned (so-called 'nationalised industries)
- In the UK the steel, car, electricity, gas and water industries were all state-owned but are now privately owned
- However, many governments still own big slices of industry, even in big countries like France.
- It may increase efficiency as the profit motive minimises loss (government reluctant to sack workers, leading to higher labour costs)
- Permitting foreign ownership allows an injection of foreign capital through FDI, introduces new technologies and promotes globalisation.
- Grants and loans are often made to new businesses especially in areas that are seen to be globally important growth areas such as ICT development, pharmaceuticals or renewable energy.
- There could also be low business taxes, well-enforced contract laws, minimum regulation and efficiency bankruptcy procedures, which encourage new firm creation.
- It creates innovation and competition in new production techniques, erodes excess profit of monopolies, lowers prices and increases household PP.
- Where legal restrictions on foreign ownership and capital controls are also removed, foreign new businesses will be attracted to start up, promoting globalisation.
- e.g. The UK Government's support for ICT start-ups in Tech City (Silicon Roundabout) in the Old Street area of London.
Other Information
- A trade bloc (not free trade) is a group of countries that agree to reduce trade barriers between them. They promote free trade between members, increasing economic globalisation.
- This ranges from a free trade area where tariff barriers are removed between members (but a common external tariff is adopted) to a single market, where all tariff and non-tariff barriers are removed, and there is a common external tariff and free movement of people. There are all non-tariff barriers (e.g. limiting number of Japanese cars imported); the euro prevents changing currency rates affecting deals.
- Trade distortion
- Imposition of common external tariff makes goods from non-members expensive. Trade distorted as the switch from cheaper non-member producer to more expensive member producer. Prices rise and SOL falls.
- Specialisation shifts resources to industries which have a comparative advantage.
- Firms being specialised away from will shut down. Workers' employment lost (though there are new jobs in the expanding specialised industry and in new demand areas from increases purchasing power)
- new jobs likely to benefit new workers and older ones less likely to retrain
- cheap uniform products across the bloc replace more expensive local variants.
- nation gives up determination of some areas of economic (and in single market, immigration) policy
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- 3.1A What is Globalisation?
- 3.1B Transport Technology and Globalisation
- 3.1C Communication Technology
- 3.2A International Organisations
- 3.2B National Governments
- 2C SEZs and Attitudes to FDI
- 3A Measuring the Degree of Globalisation
- 3B Role of TNCs
- 3C Switched Off Locations
- 3.4A Benefits and Costs of Global Shift
- 4B Environmental Problems
- 4C Deinstrialisation and its Problems
- 5A Rural-Urban Migration and Megacities
- 5B International Migration
- 5C Costs and Benefits of Migration
- 6A Cultural Diffusion
- 6B Cultural Erosion
- 6C Opposition to Globalisation
- 7A Economic and Social Measures
- 7B Trends, Winners and Losers
- 7C Economic Development and Environmental Impact
- 8A Racial Tensions
- 8B Controlling the Spread of Globlisation
- 8C Attempts to Retain Cultural Identity
- 9A Local Sourcing
- 9B Fair Trade and Ethical Consumption
- 9C Recycling
- 4A.1A Classifying Economic Activity
- 4A.1B Economic Activity and Social Factors
- 4A.1C Quality of Life Indices
- 4A.1A Changing Function and Characteristics
- 4A.2B Reasons for the Change
- 4B.2C Measuring Change
- 3A Regional and National Influences
- 3B International and Global Influences
- 3C Identity
- 4A Successful Regions
- 4B Less Successful Regions
- 4C Priorities for Regeneration
- 5A Engagement
- 5B Lived Experience
- 5C Conflicts
- 6A Stats
- 6B Media Representation
- 6C Representation and Need for Regeneration
- 7A Infrastructure Investment
- 7B Planning Policies and Stuff
- 7C Negative Effects of Governmet Policys
- 8A Sympathetic Business Environments
- 8B Partnerships
- 8C Regeneration Strategies
- 9A Re-imaging
- 9B Rebranding Deinstrialised Places
- 9C Rebranding Rural Areas
- 10A Measuring the Success of Regeneration
- 10B Success and Social Progress
- 10C Improving Living Environments
- 7.1A Defining characteristics of powers
- 7.1B Hard and Soft Power Spectrum
- 7.1C Changing Importance of 7A and 7B
- 7.2A Imperial Era
- 7.2B Indirect Control
- 7.2C Geopolitical Stability and Risk
- 7.3A The Emerging Powers
- 7.3B Strengths and Weaknesses
- 7.3C Development Theory
- 7.4A - Influence through IGOs
- 7.4B TNCs
- 7.4C Cultural Influence
- 7.5A Global Action
- 7.5B Alliances
- 7.5C the United Nations
- 7.6A Resource Demands
- 7.6B Environmental Governance
- 7.6C Middle-Class Consumption on Emerging Powers
- 7.7A Tension over Physical Resources
- 7.7B Intellectual Property
- 7.7C Political Spheres of Influence
- 7.8A Emerging Powers and the Developing World
- 7.8B Asian Tensions
- 7.8C Middle East Tensions
- 7.9A Economic Problems
- 7.9B Costs of Being a Superpower
- 7.9C Future Power Balance
- 8.1A GDP and Human Development
- 8.1B Best Development Goals?
- 8.1C Education
- 8.2A Variations in the Developing World
- 8.2B Variations in the Developed World
- 8.2C: Variations within Countries
- 8.3A The relationship between economic and social development
- 8.3B IGOs and Development
- 8.3C MDGs and SDGs
- 8.4A the UDHR
- 8.4B the ECHR
- 8.4C The Geneva Convention
- 8.5A Human Rights Vs Economic Development
- 8.5B Democratic Freedom
- 8.5C Political Corruption
- 8.6A Gender and Ethnic Differences
- 8.6B Health and Education Variations
- 8.6C Demands for Equality
- 8.7A Types of Interventions
- 8.7B Governments, IGOs and NGOs
- 8.7C Intervention and Sovereignty
- 8.8A About Development Aid
- 8.8B Does Aid Work?
- 8.8C Negatives of Economic Development
- 8.9A Military Interventions
- 8.9B Military Aid
- 8.9C Direct Military Intervention
- 8.10A Variables for Measuring Success
- 8.10B Democracy as 'Success'
- 8.10C - Economic Growth as Success
- 8.11A Successes and Failures
- 8.11B Aid and Equality
- 8.11C Aid as Foreign Policy
- 8.12A Costs of Recent Interventions
- 8.12B Non-Military may be Better?
- 8.12C - Consequences of Inaction
- 1.1A Distribution and Causes
- 1.1B Distribution of Boundaries
- 1.1C Intra-Plate Stuff
- 1.2A and B Plate Tectonics
- 1.2C Impacts on Hazards
- 3A Hazards from Earthquakes
- 3B Hazards from Volcanoes
- 1..3C - Tsunami
- 1.4A Definitions
- 1.4B The PAR Model
- 1.4C Impacts of Tectonic Hazards
- 1.5A Measuring Magnitude and Intensity
- 1.5B Hazard Profiles
- 1.5C Profile Examples
- 1.6A Inequality
- 1.6B Governance and Geographical Factors
- 1.6C Disaster Context
- 1.7A Trends since 1960
- 1.7B Megadisasters
- 1.7C Multiple Hazard Zones
- 1.8A - Prediction and Forecasting
- 1.8B The Hazard Management Cycle
- 1.8C Park's Model
- 1.9A Disaster Modification
- 1.9B Modifying Vulnerability
- 1.9C Modifying Loss
- 2B.1A Parts of the Littoral Zone
- 2B.1B Classifying Coasts
- 2B.1C Rocky Coasts and Coastal Plains
- 2B.2A Concordant and Discordant
- 2B.2B Their Morphology
- 2B.2C Geological Structure and Cliff Profiles
- 2B.3A Lithology
- 2B.3B Rock Strata and Complex Cliff Profiles
- 3C Vegetation Stabilisation of Sediment
- 4A Waves and Beach Morphology
- 4B Wave Erosion Processes
- 4C Coastal Landscapes Produced by Erosion
- 5A Sediment Transportation
- 5B Depositional Landforms
- 5C The Sediment Cell Model
- 6A Weathering
- 6B Mass Movement
- 6C Landforms Produced by Mass Movement
- 7A Long-Term Sea Level Change
- 7B Emergent and Submergent Coastlines
- 7C Contemporary Sea Level Change
- 8A Human Activity and Coastal Recession
- 8B Subaerial Processes Work Together
- 8C Temporal Variations in Coastal Recession
- 9A Local Factors that Increase Coastal Flood Risk
- 9B Storm Surges
- 9C Climate Change and Coastal Flood Risk
- A - Economic and Social Losses from Recession
- B - Flooding and Storm Surges
- C - Environmental Refugees
- 2.11A Hard Engineering
- 2.11B Soft Engineering
- 2.11C Sustainable Management
- 2B.12A Littoral Cells
- 2B.12B Policy Decisions
- 2B.2C Conflicts
- 1A - A Closed System
- 1B Importance and Size of Stores and Fluxes
- 1C The Global Water Budget
- 2A - the Hydrological Cycle
- 2B Impact of Physical Factors
- 2C - Impact of Human Factors
- 3.1 Water Budgets
- 3B River Regimes
- 3C Storm Hydrographs
- 4A - The Causes of Drought
- 4B - Human Activity and Drought
- 4C - Drought and Ecosystems
- 5A - Meteorological Causes of Flooding
- 5B - Human Activity and Flooding
- 5C - Impacts of Flooding
- 6A - Inputs and Outputs
- 6B - Stores and Flows
- 6C - Uncertainty
- 7A - Supply and Demand Mismatch
- 7B - Causes of Water Insecurity
- 7C - Finite Resources and Rising Demand
- 8A - Causes and Pattern of Physical and Economic Scarcity
- 8B - Importance of Water Supplies
- 8C - Conflicts
- 9A - Hard Engineering
- 5.9B Sustainable Water Management
- 5.9C Integrated Drainage Basin Management
- 1A Stores and Fluxes
- 1B Formation of Geological Carbon Stores
- 6.1C - Geological Processes Releasing Carbon
- 6.2A Oceanic Sequestering
- 6.2B Terrestrial Sequestering
- 6.2C Biological Carbon
- 6.3A Atmospheric Carbon
- 6.3B Maintaining a Balanced Carbon Cycle
- 6.3C Fossil Fuel Combustion
- 6.4A The Energy Mix
- 6.4B - Energy Consumption
- 6.4C Energy Players
- 6.5A Mismatch between Supply and Demand
- 6.5B Energy Pathways
- 6.5C Unconventional Fossil Fuels
- 6.6A Renewable and Recyclable Energy
- 6.6B Biofuels
- 6.6C Radical Technologies to Reduce Carbon Emissions
- 6.7A Growing Resource Demands
- 6.7B Ocean Acidification
- 6.7C Forest Health
- 6.8A Forest Loss
- 6.8B Rising Temperatures
- 6.8C Declining Ocean Health
- 6.9A Uncertainty about the Future
- 9.B Adaptation Strategies
- 6.9C Mitigation Strategies
- Imposition of common external tariff makes goods from non-members expensive. Trade distorted as the switch from cheaper non-member producer to more expensive member producer. Prices rise and SOL falls.