The Impact of the Changing Political and Legal Environment, with the Establishment of the European Union on Trade Between Europe and South Africa

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THE IMPACT OF THE CHANGING POLITICAL AND LEGAL ENVIRONMENT, WITH THE ESTABLISHMENT OF THE EUROPEAN UNION ON TRADE BETWEEN EUROPE AND SOUTH AFRICA.

by

LOGISTICS MANAGEMENT
ITEM CODE: ONB 10X8

LECTURER:

ABSTRACT

The establishment of the European Union influenced trade between the former common market (European Economic Community) and South Africa. This changing political and legal environment enhanced opportunities for trade and logistics activity in South Africa. There are also possible future trade and logistics activity threats and solution between South Africa and Europe. The removal of physical, technical and fiscal barriers enhanced trade and logistics with South Africa and there were new challenges to overcome.

1. Introduction

2.1 Background
The establishment of the European Union (EU) influenced trade between the former common market (European Economic Community) and South Africa. The EU is not only South Africa’s major trading partner; it also remains a key source of foreign direct investment (FDI). The EU account for 90 percent of South Africa’s FDI inflows (Kabundi, 2007:63). Trade between the EU and South Africa, was significantly influenced with the establishment of the EU.

This changing political and legal environment enhanced opportunities for trade and logistics activity in South Africa. There are also possible future trade and logistics activity threats and solution between South Africa and Europe. The removal of physical, technical and fiscal barriers, possibly enhanced trade and logistics with South Africa and there were new challenges to overcome.

2.2 Problem statement and Purpose of study
With the EU as the South Africa’s major trading partner, the establishment of the (EU) meant that trade with countries in the EU might have been at risk due to removal of barriers between the member countries of the EU. South Africa would have to compete with barriers that have fallen away for EU member countries.

The problem is that the challenges faced with trade between South Africa and the EU with the establishment of the EU had to be resolved. What were they and how were the overcome?

1.3 Brief statement of methodology and road map through assignment This study will be a literature research. I will discuss the establishment of the EU, and how it works. How trade between South Africa and the EU is taking place as a result of certain agreement that are in place. I use the term EU throughout this article to represent the European Union and the organisation, pre-Maastricht Treaty. Discuss and interpret findings. Draw conclusions and recommendations by referring back to conceptual framework and forward to further research.

2. The Establishment of the European Union

The EU is a group of European countries that participates in the world economy as one economic unit and operates under one official currency. The EU's goal is to create a barrier-free trade zone and to enhance economic wealth by creating more efficiency within its marketplace.

At its core the EU is a group of democratic countries working together on economic, judicial, and security issues. The EU is governed by a five-part institutional system, including the European Commission, the EU Council of Ministers, the European Parliament, and the European Court of Justice, and the Court of Auditors, which monitors EU budget spending (Anon.C, 2009).

3.3 The European Union
Initially, the EU consisted of six countries: Belgium, Germany, France, Italy, Luxembourg, and the Netherlands. Denmark, Ireland, and the United Kingdom joined in 1973. Greece joined in 1981, Spain and Portugal in 1986, Austria, Finland, and Sweden in 1995. The largest expansion occurred in 2004 with 10 new countries joining. They are: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia (Mcgrady 2009). There are currently twenty-seven member states in the European Union....
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