The European Union’s Power in Trade

Write an essay on European Business.

The European Union is forbidding power in trade. The huge size of the market of the European Union and an experience of about more than forty years dealing in international trade proposal has made it the most commanding trading bloc in the whole world. The European Union has gained much of its power through the help of trade. It has a complete control over the market, which help it to become a bargaining chip to achieve the certain changes needed in the domestic market of the partners that are in trade with the European Union, through increase in the quality of labour to the polices needed for the development(Bennett, 1997). The power of trade of the European Union is much more than that of the international market. The two deciding power that makes the European union the most powerful trading bloc in the world are the Structural Power and the Bargaining Power. It is world largest trade of services and one of the two largest in the trading of commodities. EU plays a very important role in the in the development of its member states. The development of the cities and the urban areas of the countries which fall under the European Union are the main aim of the policies of European Union. European Union wants to play an important role in the HABITAT III process of development(Mercado, Welford & Prescott, 2001). It also helps its member countries in the development of efficient use of the energy and resources, improvement of the urban environment and maintains urban flexibility.One of the main motives of EU is to reduce the barriers of trade and there were much evidence that proved EU is the biggest trading bloc of the world and it has a great influence on the member states of EU. Through the help of Econometric examination of the membership of the EU has a great impact on the country in increasing the country’s GDP level, the membership of the United Kingdom with that of the EU initially had a great boost in the trade of UK by 7%. This single market trade boost intra-EU trade by a further increase by 9%

Linguistic barrier is one of the major problems in the operation process of the European Union. The difference in culture has been playing a role of a significant barrier in the process of trade. It always affects the firm’s capacity to sell business services in the other countries. And this affect the trading feature of the European Union and also the percentage of the profit it could have achieved(Johnson & Turner, 2006). Communication is the main phenomenon in the trade and there are many countries in the European Union speaking different languages. This makes a communication gap between the countries in the European Union.The socio cultural factors are one of the main factors in the smooth operation of the European business operations. The two cultural factors that mostly effect the operation of the European Union are the difference in the local language and the difference in the tradition of business. So the need to learn the local language with the country with which there are trade activities will help in the learning curve and this has to be overcome, if smooth function of the operation is desired.Their difference among the railway of the member countries. Through the help of trucks good can be delivered but trains do not have the same availability. After the transport of goods and services issues of difference in warehousing,arises in different countries. The number of warehouse in different countries varies according to their geographical location, the capacity of skilled labour and the infrastructure of the countries industries(Harris & McDonald, 2003). Although the European union has common base of understanding with all its countries, there are still a difference in opinion of the old and the new countries, as the new countries of the European union attracts the foreign direct investment so the countries have the power in building new warehouses in very less amount of time. The new members or the new members of the European Union most of them are from the Soviet bloc does not have the same level of thought as the Western and the Northern countries of the European Union have.The European Union faces a lot of linguistic barriers and cultural barriers this makes the amount for labour to move from one country to another at very small amount as there is no proper communication and a lot of different cultures where they cannot fit in.  The amount of wages differ in a huge amount from one country to another as there is no single currency in EU, therefore the labour industry is highly affected. The wages differ mainly in the east and the west. This linguistic and cultural difference between the countries’ in EU leads in backing of the trade. The logistical barrier is one of the most important barriers in the trade through different countries of EU. Before the globalization the main of the trade cost has focused on the tariffs and quotas. But as the globalization is coming up the the nature of the trade is completely changing day by day from shipping of the final goods that was done, now the shipping of input is only done. There are many countries in the EU that are bounded by the environmental policy like Switzerland, but most of the countries are mainly bounded by it therefore the problem is faced in case of free trade between this countries.

Linguistic and Cultural Barriers in European Business

There are many funding programs which are mainly organised by the European to support its member countries. EU gives funds for the local projects in countries where there is less scope for trade and slow economic development (Harris, 1999). And this funds mostly comes to the European Union through the help of the British tax payers but this process of collecting taxes are a hectic and complex process. In some occasions the taxes are also not paid. EU has played an important role in helping the companies of France and Italy in the time of financial crisis.  For the economic development in the countries the European Union has spent over an amount of 250 million Dollars. The programmes helps the companies in the innovation and gives knowledge to increase the productivity, supports business to overcome the barriers in production and helps the companies in process of flexible development, production and consumption facilities. In the countries where there are no transport facilities EU spent a huge amount of money in building the infrastructure of the industries, roads, railway, energy and proper services of communication(Bonin & Segreto, 2011). So that proper trade facilities could be available in the country and it can move forward in the economic development. European Union has also helped the countries with employment skills and training of the labours. It helped the countries to remove barriers like Unemployment and inactive people which leads the country backward. It helped the countries to develop business ideas with small and medium sized business as to be its target.

I

This is the EU budget for the year 2012 where we can find that EU helped France and Italy by giving them a huge amount of money that will help the companies in the countries to flourish in a high amount.

Wonga is a British loan company. This loan company gives short term loans at high cost of credit. The interest rate charged by the company is excessive, for this reason the company is highly criticized. The firm has been operating in the countries UK, South Africa, Canada, Spain, Germany and Poland. Wonga is the first company in the world who has invented the process of instant loan technology. Recently it has launched an instant loan application in the I-phone(‘European Business Review’, 2006). If Wonga will get associated with the European Union it will be beneficial for both of them. As there are many countries in the EU who are in need of instant loan and it could be provided by the company. This will help in the economic development of the country and the competition in the market will also increase. New firms will originate and the country will maintain its economic stability(Reeves & Kelly-Holmes, 1997). In recent Wonga has raised 173 million dollars for the funding of the UK development and growth. This raise is a C-series expansion in the capital; it will be used in the cash expansion of the UK market which will help in the capital and developmental growth in the UK economy. The company has a rapid growth in the building of the next generation. This will help to develop the EU ecosystem; this will also help in the growth of successful incubators and accelerators in the EU market, therefore the medium term of viewpoint in the European venture capital market will be more positive in nature.

References

Bennett, R. (1997). European business. London: Pitman.

Bonin, H., &Segreto, L. (2011). European Business.Brüssel: P.I.E.-Peter Lang S.A.

European Business Review.(2006). European Business Review, 18(3). doi:10.1108/ebr.2006.05418caa.001

Harris, N. (1999). European business. Basingstoke, England: Macmillan Business.

Harris, P., & McDonald, F. (2003). European business and marketing. London: SAGE.

Johnson, D., & Turner, C. (2006). European business. London: Routledge.

Mercado, S., Welford, R., & Prescott, K. (2001). European business. New York: Financial Times/Prentice Hall.

Reeves, N., & Kelly-Holmes, H. (1997). The European business environment. London: International Thomson Business Press.