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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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.
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The resulting Maastricht Treaty was a series of agreements designed to bring political, economic, and social unity to Europe by 1993, and a common foreign and defence policy as well as a single currency by the end of the decade (Frankel 2002). It created the European Union and led to the creation of the euro.
Figure 2.1 Member states of the EU (Coyle, et. al. 2003:157)
3.4 The Euro
The European Union introduced this new currency on January 1, 1999, christening it the "euro" (€). The actual euro currency and coins began circulation in 2002. For the "interim period," transactions were carried out in either euros or the former national currencies of the member states. (Mcgrady 2009)
Figure 2.2 Coins and Notes of the Euro (Anon, E. 2009) 2003:157)
Sixteen of the twenty seven member states of the European Union have adopted the euro (€) (Anon, B. 2009). Consequently the euro is used daily by some 327 million Europeans (Anon, E. 2009). It has developed a limited role in foreign policy, having representation at the WTO, G8 summits, and at the UN (Anon, E. 2009).
3.5 Trade Within The European Union – Internal Market
The EU combined generates an estimated 30% share (US$18.4 trillion in 2008) of the nominal gross world product (International Monetary Fund
The first RTA I chose to discuss is a Non-Reciprocal Trade Arrangement called Africa Growth and Opportunity Act (AGOA). USTR.gov states, “In 2013, U.S. goods imports from sub-Saharan African under AGOA and the related GSP program totaled $26.8 billion, more than three times the amount in 2001, the first full-year of AGOA trade.” There are challenges for this agreement as the site later states, “Exports of U.S. poultry have been effectively excluded from the South African market for 15 years due to a range of trade barriers and other measures.” This agreement has potential to assist the African economy in numerous ways as the exports can create large revenue for Africa and can also provide employment opportunities. The difficulty lies with changing trade barriers that could begin to cause more products and materials to have higher taxes associated.
The Euro and its Impact on the U.S. Economy The euro is the official currency of the following 12 European nations: Belgium, Germany, Greece, Spain, France, Luxembourg, Ireland, Italy, The Netherlands, Austria, Portugal, and Finland. Although it has been the official currency since January 1,1999 it became physical tender which can be used by all participating countries on January 1,2002. The introduction of the euro into the world was truly a historic event; it represented a unity never before seen in the history of Europe, a common currency. After years of negotiations and much skepticism from around the globe, the implementation of the euro is no longer an abstract ideal, but a change that nations, corporations, and investors must
The European Union (EU) is a political economic union of 28 members. The founders are France, Belgium, Luxemburg, Italy, Netherlands, and Germany. The Maastricht treaty established the European Union in 1993. The EU aims to ensure the free movement of people, goods, services and capital and regional development. These 28 member states have successfully integrated because of their similar cultural lifestyles.
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19. The Single European Act committed EU countries to adopt a single currency, the euro.
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The superimposing factor that gives South Africa such an advantage over other prospective African business environments is that it possesses of a very powerful and sophisticated vantage-point geographically. South Africa is strategically located for manufacturing and exportation into several regions globally and can be an unmitigated platform for MNC’s who may be interested in a venture within this region. The important advantages include regional competitiveness, combined with reduced operational costs and a significantly prominent market access (Safrica.info, 2011).
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Did the Apartheid Era have a negative or neutral influence on the South African economy including international trade and the foreign sector?
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