EU and also NAFTA: Types of Grouping of Nations
Discuss the consequences of groupings of Nations. (10 Marks)
There are many types of grouping of Nations this includes the EU (European Union) and also NAFTA (North American Free Trade Agreement). Grouping of nations can have both positive and negative consequences. Firstly, a positive about the EU is that the people in the EU can move around freely to work or live there without using a VISA and further benefits can be a brain drain, for example, migrants from Poland go to the UK to work there as there is an employment gap in dentistry and healthcare therefore the UK is getting more skillful expertise within this sector. A benefit about NAFTA is that this grouping has removed most trading restrictions and tariffs allowing goods to be distributed between these countries easily for development. For example the removal for these tariffs has allowed Mexico received increased foreign direct investment. (As foreign companies established plants in the country in order to gain access to Mexico’s NAFTA trading partners’ markets), this has led to higher wages for Mexican workers and increased sales from the agricultural sector, therefore it increases the Mexican’s quality of life.
On the other hand there are also negatives for both the EU and NAFTA when grouping the nations. Firstly, a negative consequence for the EU is that certain industrial sectors are damaged by having to share resources. For example, the UK sharing its fishing grounds with other EU nations such as France and Spain and this could potentially lead to conflict between the countries as sharing would lead to competing for all the fish to sell in the market in their own countries in order to contribute a higher GDP for their individual country. For NAFTA, one of their negative consequences are that since the trade barriers are removed, Mexico has became a targeted country to invests FDI by American companies, this has caused the American company to close down and relocate their firms in Mexico, this has
There are many types of grouping of Nations this includes the EU (European Union) and also NAFTA (North American Free Trade Agreement). Grouping of nations can have both positive and negative consequences. Firstly, a positive about the EU is that the people in the EU can move around freely to work or live there without using a VISA and further benefits can be a brain drain, for example, migrants from Poland go to the UK to work there as there is an employment gap in dentistry and healthcare therefore the UK is getting more skillful expertise within this sector. A benefit about NAFTA is that this grouping has removed most trading restrictions and tariffs allowing goods to be distributed between these countries easily for development. For example the removal for these tariffs has allowed Mexico received increased foreign direct investment. (As foreign companies established plants in the country in order to gain access to Mexico’s NAFTA trading partners’ markets), this has led to higher wages for Mexican workers and increased sales from the agricultural sector, therefore it increases the Mexican’s quality of life.
On the other hand there are also negatives for both the EU and NAFTA when grouping the nations. Firstly, a negative consequence for the EU is that certain industrial sectors are damaged by having to share resources. For example, the UK sharing its fishing grounds with other EU nations such as France and Spain and this could potentially lead to conflict between the countries as sharing would lead to competing for all the fish to sell in the market in their own countries in order to contribute a higher GDP for their individual country. For NAFTA, one of their negative consequences are that since the trade barriers are removed, Mexico has became a targeted country to invests FDI by American companies, this has caused the American company to close down and relocate their firms in Mexico, this has