The European Union is a coming together of 15 member states aiming towards a brighter future. One goal of this union is to thrive in trade and commerce and to do this measures were taken to make it easier for firms and businesses in Europe to expand and flourish. In the following paragraphs I will explain the benefits and problems for firms who are part of this organisation.
When the European Union came together rules and regulations were decided and agreed upon between all of the states involved. One of these rules, the legal minimum wage has been set throughout all EU states so that now no firm in any EU country can pay their worker(s) less than the amount agreed. This not only induces fairness among all EU states but gives no country any advantages or disadvantages over another country so that all will be on a fair level with each other.
Another of these rules concerns the flow of goods from countries inside the EU to countries outside of the EU. Before we entered the EU Britain was allowed certain agreements with other countrys, if for example we agreed a deal with Japan, where by any goods that were imported or exported to our country we would forget about the tariffs and taxes that had to paid on those goods and vice versa then this was OK. When we entered the EU any special agreements we had with other countries had to be stopped and so the prices of some products sold in the UK now rose as a result.
January 1st 1993 a number of trade barriers in place at that time were gotten rid of and so firms in the UK were able to export their goods to other countries without the need to pay duties and tariffs on top of the transport costs and postage e.t.c. once these were abolished a lot of firms grew very quickly and so expanded into Europe increasing the economy of Europe.
Because firms can now transport goods to places within the EU cheaply there is no need to sell to America like most did before because it was cheaper. The benefit of this is simple, places in Europe are much nearer to our own country hence the transport and postage costs will be cheaper for firms.
Another very simple benefit to firms is that when we entered the EU the number of customers available to sell to grew threefold and more as now firms have the whole of Europe to sell to and 3 more countries who are joining in the next three to six years. I believe the amount of potential customers now within the EU. is 460 million.
The increase of good sales due to all these points shown above undoubtedly means that firms will need to produce more of the good they are selling. More goods that need to be produced require more workers to produce them. Joining the EU has enabled both the movement of workers to and from this country much easier and firms are now able to hire new labour with little fuss.
One problem of entering the EU has meant large companies such as McDonalds and Coke-Cola are disabled from being anti-competative, in other words they aren’t allowed to fix prices or the EU has said that they will be fined as a result.
Although not a direct problem of entering the EU there is still a concern for companies who wish to trade worldwide as even though taxes and tariffs have been ditched within the EU they still exist in countries outside of the European Union.
As mentioned in the benefits any special agreements that were in place with other countries have now been abolished meaning that some products have gone up in price.
Doing business with other countries in the EU has meant that some language barriers will be evident. There is bound to be problems at present and in the near future concerning complicated terms that most businesses use when doing business.
I think it is more beneficial to firms in the UK to being within the EU judging by the amount of benefits in relation to the number of problems. The dismissal of tariffs and taxes on goods within the EU has made it much easier for firms to deal in bisiness and the EU has recently seen a large increase in company size and amount of trade since January 1st 1993. Most if not all firms in the UK have benefited from one or more outcomes of being in the EU whereas most of the problems only apply to big businesses or our country as a whole. If the choice was given to British firms, ‘Do you want to stay in the EU or not,’ I’m very sure that 95% of the people in question would agree to stay.