ADM 3318 Study Guide - Final Guide: Single European Act, Foreign Exchange Risk, Foreign Exchange Market
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Easier to compare prices across europe thus increasing competition. European manufacturers will be forced to look for ways to reduce production costs. Increase the development of a highly liquid pan-european capital market. Increases the range of investment options in europe: disadvantages. National parties have lost control over monetary policy. Countries are very dissimilar with different structures of economic activity: possibility of lower economic growth and higher inflation. The eu may adopt a protectionist state against external trade: nafta, january 1 1989, eliminate tariffs on bilateral trade between canada and the united states. By 1993 mexico was included: abolition of 99% of tariffs between the countries, removal of barriers to cross border flow of services, foreign direct investment, protection of intellectual property rights, application of national environmental standards, advantages. Focus on competitive and comparative advantages between nations: disadvantages. Could hurt the mexican economy because of new competition: andean pact.
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