> _ economies Fon TH mLoMA:COURSEEOOK ‘Apelyng your skis 1 Describe how AICFTA represents economic ing into a common market ion, dont what feature wil alow tf evohe 2. Explain what AICFTA member countries hope to gain from integration, 3 leony the staksholdors who 2 ely to gein a wal as thos aly to lose fom the formation oFAICHTA, 4 Why ae some ofthe member countries fear of integration? deni an explain ther eaneams 55 (HL.onip Suppose one AICETA member county hasan absolute advantage over enother AICFTA ‘member courte inthe producton of al goods Using ciagram, expan under what contion it may sil be possible fr both counties o ein from trade, Under what cumstances might special sible? Dison, on according to comparative advantage rot bo {5 Using the information in tho tet, evaluate the thay affects of ACTA on the economies cf the Historical beckground: the evelopment of the European Union “The European Unian has origins in the European Cos! and Stel Community CSC], sre vad ae formed in 1952 by small group of = European counwies’ The ECSC sbolshed trade bares in import itary and ‘sconomic raources inclu coal. sel, Scap andiron ove. Atthe smo tine ‘sabishod insttusion far admiration, legislation ond poy as wal Court of sic to retobe disputes, The Creation of hi oe rade aes 8s the fret stop in series of efforts toward Figure 18.4: London, United Kadam Pro Soxt supporter hein closer mtagation of European counties, Patonert Sau ‘One ofthe key matvatng factors was to ‘ebuild Europe after the Second World War aswel as to prevent future hostilities and promote peoce between France and Germany, A m>15. International trade: Part In 1957, the same group of countries formed the European Eceromie Community (EC), which incidad lewerng af wade bares fora far broader renge of product, The United Krgdom joined the EEC 11973 ‘The EEC established = common market which mn alton to Fee trade and cornmon tad poy tone non-members als includes tee movement of labour and expt Common Agia Foy Cr), 23 sodl poly fe promot abou mabisty and worker protection, a wel ae pais to promote market Competitor, incling regulations preventing ant-compettie behaviour by fre ts meroership grew ‘gradual over ho yoars, and by 2073 thre were 28 member “The above polices, invoking increasing economic integration between the member counties, were mplemented by supranational bode with authority over national governments There ae sovoal sich boties, he mostimpartant of which ae the European Commission, which proposes new poles ad legislation; the Counl ofthe Erapean Union andthe European Parmer, reponse fr legilaton (Gus) hat all member counties must bide by; andthe European Cour of Jue, tel esahes apes. ln 1993, the EEC changed its name tthe European Union own a the EU, Over tine, ation functions and abjecives wore developed, among wich were eo-aesnaon of foreign poly, Savlepment 2Sstance pay fo les developed countries,» common research and development ply R&D). ¢ fecal poy protecting werkers ight and a ragional development pay the supports rang to reduce tnemeloyment Eventaly 19 ofthe 2 EU countries abve up thet national cunences, adopted the auras their curency, and govs up thor oun independent monetary pay trough he exablshment ofthe Eurpesn Monetary Union tee below), The United Kingdom mes not among the counts that doped the evo, refering be inthe EU with ts own currency, the Bish pound, rd scum dependent monetary poy. Gradual, ver the decades, he European Union has achieved an unprecedented degre of economic integration, far restr than any other international organisation Broxit: UK decides to leave the European Union ore asked if they wished the United Kingdom to les or ema within te European Unan- England ond Wiles voted tebe, while Northern tend ond Seoiand voted to remain The reat ver cane ut in favourof leaving with 52% Lesvers’ ss apposed to 48% Remazers This event cama to be know Broxit made up of the words Briain and ent Iwas received wth great sures aoune the word the ‘expectation everhere was that the United Kingdom would choose to rein nthe EU ‘The main arguments in favour of leaving the EU include the following ‘+ Loss of sovereignty Many Leave votes belive tat decisions that involve the United Kingdom shoul betaken nthe UK by the UK goverment not by bureavort in Bsr wher the EUs edinst sion islocated tis argued thatthe EU isttusions ae not scout fo voters Opposition to immigration The ree movement of labour principle ofthe EU resus nn inward inigratoninto the Unted Kingdom fom ote EU counties Many Leavers belleve tat the Ue Kngdom should take beck contal oft boder 0 ao regin te yf restrict immigration, and cantol the range of sll of workers who ener the county m accordance wih necesEcONoWS FoR THE IFLOMA: COURSEBOOK coee——ewreerevr Oppoeion othe cst union As mena ofthe EU ctor urn, te Unind Keds ube ree he tara thd conten repent att coo oe conmon cera ela cemos lhe £0 anon he £0 weld moon te Ut King cern eA erence Sel snes mt any ter coat rp of cres poston to cortbutlons to the EU budget ne EU colncaoney or ach of theraber Peet es eertaine Common hu Pie, appar Gnpese ear an her See {Ouch hans ot con tobe UK oon pound nny hes enous SEROSRELET Go ecaing whe Oe i tosoml Sas Opporans to be EU. roar Se hhc UC ae fee cool ener how is meney 3ser “pret ote ere The Unted Kingdom hes not capa eu at ct above How ere sags soel of eu capes on the eo sve oes econ eee ener negated ssh rough eal nen. Asser ae oppomdio me Ctegrton soon oso fay sete ana te ppt tothe Common Agta Poly (APY The CAP stich sips EU fame heh Cre sca aed seh pen Cant oss stators oe proprio te 23s Ye peerceneficany Loner that United Kingdom dos ot eed pp oe ESM or do ey moto comtbce oe andy ppenionoegiaon protecting workers ths bee rin tht EU elton ht poets rere finn haven agent ennge caida ase petit sca od Tepe pets Sargent tom te pot ight the EU impos too may regulation Some peopl arg ta AoE iarcindyideandwataton swear socal poncton bee se) sie eorerie Say ond pues Pew promot ot wn alr “nagomont om the pot lf the EU sports big corporation Peni cn te oposte Ae eee emcaunces pettomefomtemyrccrson sparngee | ‘rors of power ‘tn orgurontsnfevour of rman in the E nla the lowing Trade the EU ougty 0% ol he UX npr we toward EU, wh mds of nt hal aillon Fer kh Ge kagaom hs fo css thn ve venice he Une Keg Peete Ue wi ower cea faa poste neg race dest ith ar eat Sis eee he eee ln wth the E0. Toren woud bea nner ecine nO opr invertnont us UX nvroent inked with th guararted markets fhe EW that te Unig ieee ane Usage Ev enon poten ar fe EUnet pose ak hat UK tear Foreign direct investment (FD) The United Kingdom arco of feign cect investment bocouse Tofosec accom to he mares ofthe EU courier Leaving the EU creates the rik that FD wl laste the Unted Kingdom, going EU counties that maintain that acces “obs and employment The above rks tat rie from trade and investment rest ks fer the labour smart woul! ac rom 2 reduction naval jobs Crrying ou business in EU counties Cormon rus for crying out busines mean thathore iso | feu tps and rotanel reguatons that UK fre must confront nth dealings wth other tusnesesin the EU coun EU worker legislation Tho EU has lw about equal pay fr men ard women four weeks paid annual Teave forall workers bars on uctiination co to age rae or sexal erento: pls numerous her Dont or workers15 International trade: Part + Thelsue of immigration Some supporters of EY membership argue that nmigatin ia ch sur of culture hat shouldbe welcomed is moreorer n mporant cours of labour sills of which there a not {enough the Unted Kingdom. Without emigrant thre woud be storages of abou nthe hawralen ‘re sores as wall ax balding end eres nduran, Menever, newly 750000 UK cteanslve work ‘ther EU countnas UK cere would oes the ight to move to an EU county to lve and work there ‘+The Common Agriultual Poi (CAP) Tho CAP isin the proces of bang reformed, uth view 0 reducng is ineftenles. the Usted Kingdom remains the EU col partcost in efar tick could wort the United Kingdom ong tor intrest, ‘+The ll ofthe pound & Leave voto nthe referendum wae expect to aut in & sharp cop in th posed de to the urea that Brox woul eat nthe business word Infact the pound cid Euler precious deine, whic rested inflsionny presse, Since he rferencuy, the UK hs experianced flation, and with nominal incomes ragnant el incomeshave een ing, + Global potical influence tis ely that he Unites Kngdem can havea geste infencen global | polis ond negofatione sea member ofa large a poner bic Ike th EU athe than acting ems oun, Tho referendum of Je 2016 id not mean tha the United Kingdom would immediately lave the EJ, In Mech 2017, the Bish me Minster formally informed the EU fat the Unted Krom nas lebing {rough the so-called Arte 50), Flowing th, the Unita Kingdors had «ped ol two yoors to regotiat withthe EU the natire of te relatonship withthe EU after formal departure, scheduled 1 take place in March 2019, Due to inability to complete the nepatiations tha date na later entonde to 3 (Getaber 2019. Felloning another delay Brett took pace on 3 January 2020 became apperent curing the negotiation thatthe United Kingdom wanted to maintain ree trade with {the EU, Fom which ithes wemendous benefits, but with restscone on immgyaton. The EV onthe other hand fused to spit the free movement of goods senices, people and copa ‘Applying your sill 1 Distinguish beween membership inthe European Union and membership inthe 2 Using a appropriate diagram explain why the opin the pound created inflaticnary pressures in ‘he Unted kingdom 3 Explain the difrence between nominal and real incomes. Using the information inthe text exp wy ea incomes inthe United Kingom have boon fling, 4 Uptothe time of Brest, numerous sues had vied to rece the economic eet that this would have. Most ofthese were pessimistic bt highly variable, predicting mis negative to very srondy rnogatve effect Investigate the elects that Brent has had onthe UK ecanomy by examin 1 the value ofthe pound in elation tthe euro b expons, unemployment # infaten, economic oroth, ane foreign ret nvestment A AA ALINE LI CELIO ESE SS ES a)