4.3.4
The EU & the WTO
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World Trade Organisation
The World Trade Organisation (WTO) is where countries meet to try and negotiate a reduction in trade barriers. Lower trade barriers can help to encourage specialisation and increase global output.
GATT of 1947
- Many countries came together to form the General Agreement on Tariffs and Trade (GATT) in 1947.
Rounds of negotiation
- Since 1947, the negotiations have happened in rounds.
- Countries will negotiate one agreement, then come back some time later and negotiate another agreement.
The WTO now
- The role of the WTO is still to encourage free trade, to provide a forum to resolve trade disputes, to lower tariff barriers.
- The Most Favoured Nation Principle (MFN) says that any tariff reduction offered to one country must be offered to all (against trade discrimination).
- The WTO Began with 23 members, and now has 163 members.
- But the WTO is under threat from, in particular, the US' more protectionist stance.
The European Single Market
The European Single Market is a customs union where all internal borders and between country restrictions have been removed.
Features of the European Single Market
- The European Single Market has all the features of a customs union in addition to a number of other features:
- Free movement in goods and services. In almost every case, goods sold in one country are available to all other countries.
- Free movement of people. People are able to live and work in different countries in the single market.
Features of the European Single Market (cont.)
- Free movement of money between member countries.
- Agreed standards and regulations for all goods and services produced in the single market.
- Members agree not to set rules or make laws that favour their own domestic firms, products or workers over other countries in the market.
Consequences of EU membership
- European Union membership implies membership of the European Single Market and so all the features the market entails. In particular the freedom of movement of goods, services, people and money.
- Members also agree to the rules of the customs union including the common external tariffs.
- Members must accept laws and rulings from EU institutions including the European Court and Parliament.
Brexit
- There were two key battlegrounds in the lead up to the Brexit vote.
- Firstly, the free movement of people – which many believed had led to increased immigration into the UK, higher unemployment and higher costs for the government in supporting immigrants through benefits and government run services including schools.
- Secondly, autonomy over laws – a number of Brits argued in favour of Brexit as it would mean that the UK would no longer have to accept the laws and rulings of the EU parliament and court.
Brexit (cont.)
- But lots of NHS workers come from the EU and lots of the goods (like BMW cars) that we purchase are bought tariff-free from EU countries.
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences1.3.2Political & Legal Change1.3.3Economic Environment1.3.4Social & Technological Environment1.3.5Lifestyle & Technological Environment1.3.6Corporate Social Responsibility1.3.7The Competitive Environment1.3.8Innovation1.3.9Risk & Uncertainty1.3.10Porter's Five Forces1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
Jump to other topics
1Exploring Business
1.1Features of Business Organisations
1.2Organisation of Businesses
1.3Business Environment
1.3.1External Influences1.3.2Political & Legal Change1.3.3Economic Environment1.3.4Social & Technological Environment1.3.5Lifestyle & Technological Environment1.3.6Corporate Social Responsibility1.3.7The Competitive Environment1.3.8Innovation1.3.9Risk & Uncertainty1.3.10Porter's Five Forces1.3.11SWOT Analysis
2Marketing Campaigns
2.1Marketing
3Business Finance
3.1Sources of Finance
3.2Financial Planning
3.3Financial Statements
4International Business
4.1Globalisation
4.2International Business
4.3International Economic Environment
4.4Factors Affecting International Business
5Principles of Management
5.1Management & Leadership
5.2Theories of Motivation
6Business Decision Making
6.1Business Principles & Practices
6.2Quality Management
6.3Human Resources
6.4Documents & Business Decisions
Practice questions on The EU & the WTO
Can you answer these? Test yourself with free interactive practice on Seneca — used by over 10 million students.
- 1Which of the following is NOT a role of the WTO?Multiple choice
- 2Which of the following are the roles of the WTO?True / false
- 3
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- 5
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