Key Terms and Organisations
Key Terms and Definitions: * Import - To ship (commodities) into a country from abroad. * Export - To ship (commodities) to other countries or places for sale, exchange, etc. * Balance of Payments - an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country's exports and imports of goods, services, financial capital, and financial transfers. * Deficits - An excess of expenditure or liabilities over income or assets in a given period. * Surplus - An amount of something left over when requirements have been met; an excess of production or supply over demand. * Free Trade - A policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports). * Protectionism - The theory or practice of shielding a country's domestic industries from foreign competition by taxing imports. * Import Taxes/Tariffs - A government tax on imports or exports. * Quotas - A limited quantity of a particular product that under official controls can be produced, exported, or imported. * Subsidies - A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy is usually given to remove some type of burden. * Tangible Goods - Physical products which are typically shipped to the buyer * Foreign Direct Investment - A Company or organisation from one country making a physical investment into building a factory in another country.
The European Union (EU)
The EU is an economic and political union of 27 European member states. The EU operates through a system of supranational independent institutions and intergovernmental negotiated decisions by the member states. Examples of institutions of the EU include the European Commission, the Council of the European Union, and the European Central Bank.
The EU has developed a single market through a standardised system of laws which apply in all member states. Within the Schengen Area (which includes EU and non-EU states) passport controls have been abolished. EU policies aim to ensure the free movement of people, goods, services, and capital, enact legislation in justice and home affairs, and maintain common policies on trade, agriculture, fisheries and regional development. A monetary union, the Eurozone, was established in 1999 and, as of January 2012, is composed of 17 member states. Through the Common Foreign and Security Policy the EU has developed a limited role in external relations and defence. Permanent diplomatic missions have been established around the world and the EU is represented at the United Nations, the WTO, the G8 and the G-20.
With a combined population of over 500 million inhabitants, or 7.3% of the world population, the EU generated a nominal GDP of 16,242 billion US dollars in 2010, which represents an estimated 20% of global GDP when measured in terms of purchasing power parity. The EU is composed of 27 sovereign Member States: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
Advantages of the EU: * High reduction of war probability, common foreign policy. * All European countries entering the EU are bound to restrictions that are favourable to their economy and development. * A European currency that reduces monetary instability; eliminates exchange rates and favours trade. * Europe strengthens each member country because it is bound to other member countries and is therefore stronger against other big economies. * Europeans can move around freely within the European Union and therefore seek