TO: (Yulius Santoso), Rank in Corporation
FROM: ), Rank/Division in Corporation
Our company produces and exports Australian honey, and we plan to export our goods to Mexico/France (choose one). Since this country is part of NAFTA/EU (respectively), what are the pros and cons of us exporting to this regionally integrated market?
I strongly recommend that our company shouldn’t be doing any exports to not only France but all the members within EU, or any similar regionally integrated markets. Since the main justification behind regional trade agreement is in the best interest of the regional members and at the expense of diverting trades from third party countries. In another word, very few advantages can be found from an exporter’s point of view, not to mention a great deal of stumbling blocks in terms of government protectionism for the better soundness of EU’s internal trade.
Countries like EU are very regionally economically integrated in that there are strong economic union as well as political integration, especially in terms of trade. As a result, EU will very much benefit from its regionalism from the reduction of tariff and non-tariff barriers that are only enjoyed by member states. Certainly it’s more profitable to expand our market, especially in big country like France, however the drawbacks outweigh extensively in that our competitive advantages will be easily offset by the internal reduction of barriers in EU honey manufacturing industry, consequently leaving us very little profit margin.
Besides the fact the sales might shoot up in the short term, there are almost no pros but cons in exporting to EU, including a lengthy due- processes, no advantages compare to EU members and great degree of country and economic risks. France is the second biggest member in EU in terms of honey consumptions. It will certainly account for a major proportion of our production outsource. This will...