Contents

Contents.............................................................................................................................1 Executive Summary...........................................................................................................2 Introduction........................................................................................................................3 Main body..........................................................................................................................4 Discuss the importance of international trade, economic integration and global markets to GiayViet Joint Stock Company. ................................................................................4 Define what is international trade...............................................................................4 Importance of International Trade..............................................................................4 Economic Integration.................................................................................................5 Influences of Economic Integration............................................................................6 2. Analyze the impact of two policies of the European Union on Giay Viet Corporation....................................................................................................................7 a. Monetary system (EMS).........................................................................................7 b. Social policy...........................................................................................................8 3. Explain the economic implications for the UK of entry into EMU............................8 a. What is EMU? .......................................................................................................8 b. The advantages of an EMU member countries ....................................................11 Conclusion.......................................................................................................................14 References:.......................................................................................................................15

Last is explain the behavior and competitive strategies employed by Giay Viet Corporation and discuss the role of the competition commission and regulatory bodies. writer will use a range of examples to illustrate the relationship between market forces and Giay Viet Corporation responses. Conclusion is analyzing the impact of two policies of the European Union on Giay Viet Corp and explaining the economic implications for the UK of entry into EMU. After that. Part two is the importance of international trade. economic integration and global markets to Giay Viet Corporation. This part will be presented on PowerPoint.Executive Summary This assignment is separate to two parts: Part one reporter will explain how market structures in the above case study deviate from the model of perfect competition. .

UEA in 2008 . slippers. District 3. also.2009. Giay Viet Corp. VNG. kid’s casual. . has built successfully in business shoes industry (formed to developed and distributed the company’s shoes products for the domestic and international market).. is built from among members in Vinagiay Co. Ho Chi Minh City. North South America..VNG) is found at 1990 and a shoes company which has fifty years experiences that provides products and customer care services to consumers for the shoes fashion industry. VNG has informed thousands shoes styles with many different design shoes sizes for market sector such as Europe. women. children. Its headquarters is located in Hochiminh City and having branches in Hanoi Capital as well as in main cities all over of Vietnam. Giay Viet Corp. and Asia. entering joint ventures and building partnerships with other enterprises in Europe.Ltd. India.Men. sandals shoes are main products. Giay Viet Corp. Giay Viet Corp. is built from among members in Vinagiay Co.Introduction Giay Viet Corporation (Vinagiay . Also. has built successfully in business shoes industry (formed to developed and distributed the company’s shoes products for the domestic and international market). has plans to enter West Africa. Giay Viet Corporation is successful shoes manufacturing company located at Ly Chinh Thang.Ltd. Vietnam. VNG will be expanded business by opening large wooden shoes manufacturing factory in December 2007 Vina Giay is expanding its production and trading business by purchasing stocks.

This type of trade gives rise to a world economy. For an individual company. • Some goods and services are highly specialized and the domestic market is too small to allow economies of scale to be exploited. . exporting to overseas markets can be attractive for a number of reasons: • Overseas markets represent new market segments. an organization may wish to reduce its dependence upon one geographical market.Main body Discuss the importance of international trade. in which prices. representing not only opportunities for domestic producers to earn revenue from overseas but also threats to domestic producers from overseas competition. • The nature of a firm's product may require an organization to become active in an overseas market. that international trade still allows for inefficiencies that leave developing nations compromised. pages 278-289) Importance of International Trade International trade is becoming increasingly important. As it opens up the opportunity for specialization and therefore more efficient use of resources. or supply and demand. economic integration and global markets to GiayViet Joint Stock Company. Define what is international trade International trade is the exchange of goods and services between countries. however. • As part of its portfolio management. • Commercial buyers of products operating in a number of overseas countries may require their suppliers to be able to cater for their needs across national boundaries. Opponents of global free trade have argued. • Saturation of its domestic market can force an organization to seek overseas markets. (BPP Business Environment Coursebook. international trade has potential to maximize a country's capacity to produce and acquire goods. affect and are affected by global events.

Even the richest countries buy raw materials for their industries from the poorest countries. no country in the world can be economically independent without a decline in its economic growth. Furthermore. a number of reasons can be identified for the increasing importance of international trade: • Goods and services are traded to exploit the concept of comparative cost advantage. such situation hampers economic progress. This is meant in turn to lead to lower prices for distributors and consumers (as no customs duties are paid within the integrated area) and the goal is to increase trade. people with money can acquire goods and services which are not available in their own countries. • The removal of many restrictions on international trade. economic integration has been thought of as the "second best" option for global trade where barriers to full free trade exist. (hubpages. and although realized within certain developed states. . 2010) Finally.• Economies of scale also result from extending the use of brands in overseas markets. If every country produces only for its own needs. Free trade is treated as an idealistic option. Hence. Because of international trade. such as overseas travel. From the perspective of national economies. (docs. with free competition and no trade barriers whatsoever. The trade stimulation effects intended by means of economic integration are part of the contemporary economic Theory of the Second Best: where. satisfaction of consumers can be maximized. which can only be provided by overseas suppliers. in theory. • Cultural convergence which has resulted from improved communications. the best option is free trade. the standard of living of the people all over the world would have no chance to improve. • Increasing household disposable incomes results in greater consumption of many categories of luxuries. Clearly.google. then production and consumption of goods would be limited. 2010) Economic Integration Economic integration refers to trade unification between different states by the partial or full abolishing of customs tariffs on trade taking place within the borders of each state.

Process integration and participation into WTO of Vietnam from a year brings opportunities and challenges that businesses must be overcome. Businesses need to have the appropriate strategy to adapt to new business environment.Vietnam's GDP increased 6. it will take back many opportunities for the businessmen such as trading business for abroad. (mutrap.5 billion USD. Australia. 2010) Giay Viet Corp had many advantages from when Vietnam entered WTO. Influences of Economic Integration Globalization and international integration is a general trend of the world. Giay Viet Corp is more and more high prestige as well as more. the General Statistic Office stated that to promote administrative reform program to help businesses step up production and increase competitiveness. and become a powerful trade name in the world market. Hong Kong. According to research. Vietnam continuously try developing to integrate world economic. In long times. and the Fair of Vietnamese high quality goods. Giay Viet Corp had many extra customers from many countries in the world such as USA. Dollar depreciation . Singapore. the economic global is not fixed. 2010).8% of export value total. promoting reform and economic growth. Trade gap in 2008 was 17.25% compared with growth rate in 2007.saga.9 million units. EU countries. make up 27. But in current time. and Japan.23% in 2008. When Vietnam joined WTO. decreased 2. In order to take advantage of labor resources and cheap raw materials. up 44. The company participated in many international fairs both in-country and abroad such as All China Leather Exhibition 2009 (ACLE) and China International Footwear Fair (CIFF). But now it is degradation. the Viet Fair 2006. American economy is the largest economic in the world. Market is not exciting as before.7% from 2003. government needs to promote the construction of infrastructure of the economy-society (taichinh. Total of production-business unit across the country increased 3. Many businesses bankrupt. This year. the Dubai Fair. In oversea. There will be greater opportunities for Vietnam cargo to penetrate and expand markets overseas. Taiwan. the European Fair (Brussels). International Fashion Fair and Bangkok Footwear 2009 (Biff & BIL). WTO integration is a favorable opportunity to transfer economic structure. cooperating the other large international company. There are a lot of influences in all businesses around the world. meeting the demands of the competition. the WTO integration influences the import-export activities of the country. the Poland Fair.

Analyze the impact of two policies of the European Union on Giay Viet Corporation. Its purpose is “to establish greater monetary stability in the European Union. On the other. most of the EEC countries agreed in 1972 to maintain stable exchange rates by preventing exchange fluctuations of more than 2. European Monetary System (EMS) was an arrangement established in 1979 under the Jenkins European Commission where most nations of the European Economic Community (EEC) linked their currencies to prevent large fluctuations relative to one another. avoid inflation risk premium.25% (the European "currency snake"). It would also limit the divergence of national inflation rates and permit lower. In March 1979. The basic elements of the arrangement were: • The ECU: A basket of currencies. reduce the distortion impact of tax and social security systems and maintain social cohesion and stability. Monetary system (EMS) European Monetary System was set up in 1979. preventing movements above 2. After the collapse of the Bretton Woods system in 1971.” (BBP Professional education. Situation of inflation also increased. less variable inflation. beginning in 2008. Giay Viet Corporation also affected a lot. Receipt reduces revenue compared with the previous year. 2004) In Europe. this system was replaced by the European Monetary System. and the European Currency Unit (ECU) was defined. a. 2. Enterprises encountered some difficulties. Such a system would protect the large intra-European trade flows against the sharp shifts in competitiveness which was thought likely to occur in its absence. The exchange rates between currencies can fluctuate considerably.25% (6% for Italy) around parity in bilateral exchange rates with other member countries. petrol price increase is very high.makes businesses to lose the hole. EMS is playing a very important role to recognize change in relative prices. • An Exchange Rate Mechanism (ERM) . The cost for transportation increased.

What is EMU? EMU is an abbreviation of Economic and Monetary Union. achieving economic convergence (that is. equal pay principle and make provision for the harmonisation of social security measures to accommodate migrant workers. If we take a country such as the UK. 2010). An important element of this is the European Exchange Rate Mechanism ("ERM II"). the government planned in the 2004-2005 tax year to spend roughly £320 billion on what may conventionally be defined as “social” or social policy spending. their economic cycles are broadly in step) and culminating with the adoption of the euro. Explain the economic implications for the UK of entry into EMU a. Social policy Promoted close co-operation between member states. EMU consists of three stages coordinating economic policy. .e. expected or unexpected. that is to say. working conditions. It contains the requirements that need to be fulfilled and the time framework within which this must be done in order for a country to join the monetary union. cooperation on economic policy. This term covers cooperation in the EU which concerns both economic and monetary matters. The consequences of social policy are those changes which social policies have actually achieved in relation to their aims or any other impact general or particular. i. Social Policy is concerned with much. 3. in which candidate currencies demonstrate economic convergence by maintaining limited deviation from their target rate against the euro. hospitals and schools. The European Monetary Cooperation Fund: created in October 1972 and allocates ECUs to members' central banks in exchange for gold and US dollar deposits b. The aims of social policy are what social policies intend or hope to achieve. the EU's single currency. employment. particularly in matters relating to training. social security & collective bargaining. which they may have had in society. The Copenhagen criterion is the current set of conditions of entry for states wanting to join the EU. much more than the things that government spend our money on.• • An extension of European credit facilities. on things like pensions. on a common currency (the euro) and on the setting up of the European Central Bank (eu –oplysningen.

Denmark. Sixteen member states of the European Union have entered the third stage and have adopted the euro as their currency. the United Kingdom and Sweden have not joined ERM II and Denmark remains in ERM without proceeding to the third stage. Countries in blue: EU members that do not use the euro and are not members of the EMU. The five remaining (post. Countries in red: EU members that EU/EMS Members of the Economic and Monetary Union (EMU) use the euro and are members of the EMU. these countries have not introduced the euro. Italy. The central banks should consult each other on questions of . the United Kingdom and Sweden are not participating in the third stage of EMU. Of the pre-2004 members. These eleven EU members continue to use their own currencies. Belgium.e. except Denmark and the United Kingdom. The countries should mutually oversee each other’s economies to ensure a more uniform development. Luxemburg. and Lithuania are the current participants in the exchange rate mechanism. Latvia. Ireland. Germany. In 2001. Greece joined. Netherlands. i. Finland. Estonia. First stage of EMU: The first stage of EMU meant that the countries should coordinate their economic policies to a greater degree. Portugal. France.All member states. At the Madrid European Council in June 1989 it was decided on the basis of the Delors Report that the first stage of Economic and Monetary Union should be realized on 1 July 1990. have committed themselves by treaty to join EMU. Denmark. The current members from originally from in 1999 include: Austria. 2004) states have yet to achieve sufficient convergence to participate. and Spain.

monetary policy and the countries should participate in currency cooperation in the European Monetary System (EMS). At the Madrid European Council in December 1995 the date for the third stage of EMU was fixed as 1 January 1999. The Maastricht Treaty contained. which entered into force on 1 November 1993. France. Portugal. December 1990 saw the start of the Intergovernmental Conference resulting in the Maastricht Treaty. Third stage of EMU: The third stage of EMU thus began on 1 January 1999 for the 11 participating countries (Greece was not admitted until 1 January 2001). Luxembourg. In May 1998 the Heads of State or Government decided at a meeting in Brussels that the third stage of EMU could be introduced at the beginning of 1999 in 11 Member States: Belgium. Italy. At the same time it was decided that the name of the common currency should be the euro and that euro banknotes and coins should be introduced in 2002 at the latest. Germany and Austria. the legal basis for the second and third stages of EMU. were set up. At the same time the European System of Central Banks and the European Central Bank. among other things. The common monetary and . Finland. which was set up in 1979 and has now been transformed into ERM II. In order to achieve this. Ireland. The European Monetary Institute (EMI) was set up for the purpose of coordinating monetary policy by strengthening the cooperation between the Member States’ central banks and preparing for the introduction of the common currency. the Netherlands. This stage meant that the participating states fixed their exchange rates irrevocably and introduced the euro. The aim of this stage was to have a more stable and uniform development in the EU. the countries had to strive to fulfill a number of economic requirements – the convergence criteria. and the provisions on this were very close to the proposals presented in the Delors Report. which replaced the European Monetary Institute (EMI). Spain. Second stage of EMU: The transition to the second stage of EMU took place on 1 January 1994.

alongside the dollar and the yen. The European states want the euro to become one of the premier currencies in the international financial market. which may encourage competition and may result in lower prices for consumers. joining into EMU has advantages below: - Currency stability: A single currency should end currency instability in the participating countries (by irrevocably fixing exchange rates) and reduce it outside them. and have to have achieved a high degree of sustainable economic convergence. The countries participating in the third stage are obliged to comply with the provisions contained in the Treaty and the Statute of the European System of Central Banks (ESCB). On 1 January 2002 euro coins and euro notes were introduced in the euro area and as of 28 February 2002 the euro was the only legal means of payment in the euro area. Following BBC News. Use of the common euro eliminates the currency exchange fees from the cost of doing business between the European states. An end to internal currency instability and a reduction of external currency instability would enable exporters to project future markets with greater certainty. International investors will likely diversify their portfolios with Euros. This could unleash great potential for growth. The advantages of an EMU member countries The conversion to a single European currency provides a number of advantages. proponents of the EMU hope that the use of the euro will stimulate economic growth and may reduce the unemployment rates in the participating member states. A consumer might wish to make one large purchase or transaction . encouraging more investment in the European continent. - Tourism: Consumers would not have to change money when travelling within the euro zone. it would be more stable against speculation than individual currencies are now. By encouraging stability and efficiency. and would encounter less red tape when transferring large sums of money across borders. b. Travelers will no longer be forced to change money and pay banks the commission charges.exchange rate policy of the countries is complemented by the fact that the countries are obliged to coordinate their economic policies as a matter of common interest. Companies will be able to quickly compare prices with their competitors. Because the euro would have the enhanced credibility of being used in a large currency zone.

small firms stand the most to gain. A single currency would help such transactions pass smoothly. - Business benefits: Likewise. Facilitation of trade 3. Lower interest rates 4.and for home owners to lower mortgages. Experts estimate that currently the currency cost of exports is ten times higher for small companies than for multi-nationals. Confusion in the transition to EMU: 4. would no longer have to face the costs of accounting in different currencies. But UK did not enter in to EMU. Economic policy stability 2.across a European border such as buying a holiday home or a piece of furniture. not using the currency of the EMU is Euro. The stability pact (the main points of which were agreed at the Dublin summit of European heads of state or government in December 1996) will force EU countries into a system of fiscal responsibility which will enhance the Euro's international credibility. Lower confidence arising from loss of national pride UK is also a member in the European. UK uses private money is pound. and lower interest rates . who can offset sales against purchases and command the best rates. - Cheaper mortgages lower interest rates: A single currency should also result in lower interest rates as all member countries if the new European Central bank takes on the monetary credibility of Germany's Bundes bank. involved in commercial transactions in different member states. businesses would no longer have to pay hedging costs which they do today in order to insure themselves against the threat of currency fluctuations. Surprisingly. Exchange rate is difference with . The need to compensate 3. Pros and Cons of Joining EMU Advantages 1. This should lead to more investment. more jobs. Businesses. Preservation of the City’s position: Disadvantages Loss of national control over economic policy 2.

2010). it will bring many benefits to the UK and Giay Viet Corp. will have a much smaller economic impact. If UK joins into EMU. The removal of the exchange rate between the UK and the euro area would reduce a barrier to doing business across a huge market. Entry into EMU would offer UK industry potential opportunities as well as challenges. Strong competitive business sectors would prosper and find new opportunities to expand. With many benefits. cross-border trade and investment between the UK and the euro area could rise. As a result. but beside that there are challenges for the UK is about controlling monetary policy and financial. (HM Treasury. however. According to Euractiv. accounting for only 5% of the EU-12. UK will raise integration in the European Community. The UK's participation in EMU will improve the performance of the Euro to USD. an increase in expected economic growth in Europe. UK to join EMU may change the structure. while the integration of all the other candidate countries. economic and financial point above. the UK represents over 20% of EMU's GDP. UK is also a market of Giay Viet Corp. If there is a change in monetary policy of the UK it will certainly affect Giay Viet Corp.Euro. would have to adapt to an environment of increased competition. UK will attract more capital investment than ignored because the barriers of exchange rates. Join EMU. reduce inflation. EU will become Euro land would on average have a stronger equity culture. the level of competition in EU industry and markets might increase. weaker industries. Over time. .

.Conclusion This report concerned with information about Giay Viet Corp – one of the footwear company leading. How is the impact of two policies of the European Union on Giay Viet Corporation? There are European Monetary system and social policy. After international integration. customer can base on information above in order to bring out the best choice. However. The investor. Giay Viet Corp becomes more popular with more customer and more opportunities for development. The last is explaining the economic implications for the UK of entry into EMU. Giay Viet Corp need to frequently change models and offer competitive prices to be able to stand on the global market.

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