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Free and fair trade in the European Union and Poland. What is the trade?.
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Whatisthe trade? • Trade is the transfer of ownership of goods and services from one person or entity to another by getting something in exchange from the buyer. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and services.
As a result, buying can be separated from selling, or earning. The invention of money (and later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade. Wholesale trade is defined as the sale of goods or merchandise to retailers, to industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services
Whatisthe international trade? • International trade is the exchange of goods and services across national borders. • In fact, it is the increasing prevalence of international trade that is usually meant by the term "globalization".
Trade sanctions Trade sanctions against a specific country are sometimes imposed, in order to punish that country for some action. An embargo, a severe form of externally imposed isolation, is a blockade of all trade by one country on another. For example, the United States has had an embargo against Cuba for over 40 years.
Trade barriers Although there are usually few trade restrictions within countries, international trade is usually regulated by governmental quotas and restrictions, and often taxed by tariffs. Tariffs are usually on imports, but sometimes countries may impose export tariffs or subsidies. All of these are called trade barriers. If a government removes all trade barriers, a condition of free trade exists. A government that implements a protectionist policy establishes trade barriers.
Free trade Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage the policy permits trading partners mutual gains from trade of goods and services.
The European Free Trade Association • (or EFTA) is a free trade organisation between four European countries that operates parallel to, and is linked to, the European Union (EU). Today's EFTA members are Liechtenstein, Iceland, Norway, and Switzerland—the latter two being founding members. EFTA states have jointly concluded free trade agreements with a number of other countries.
Free trade areas in Europe The European Union (EU) has always operated as more than a free trade area with its predecessor,the European Economic Community (EEC) being founded as a customs union. The EU shares its single market with three EFTA members via the European Economic Area and has a free trade agreement of some level with most other European countries.
Features of free trade Free trade implies the following features: • Trade of goods without taxes (including tariffs) or other trade barriers (e.g., quotas on imports or subsidies for producers) • Trade in services without taxes or other trade barriers • The absence of "trade-distorting" policies (such as taxes, subsidies, regulations, or laws) that give some firms, households, or factors of production an advantage over others • Free access to markets • Free access to market information • Inability of firms to distort markets through government-imposed monopoly or oligopoly power
The VAT: Menace to free trade A valueaddedtax (VAT) is a form of consumptiontax. Fromtheperspective of thebuyer, itis a tax on thepurchaseprice. Fromthat of theseller, itis a taxonly on thevalueadded to a product, materialor service, from an accounting point of view, by thisstage of itsmanufactureordistribution. Themanufacturerremits to thegovernmentthedifferencebetweenthesetwoamounts, and retainstherest for themselves to offset thetaxestheyhadpreviouslypaid on theinputs Thevalueadded to a product by a business isthe sale pricecharged to itscustomer, minus thecost of materials and othertaxableinputs. A VAT islike a salestaxinthatultimatelyonlytheend consumer istaxed. Itdiffersfromthesalestaxinthat, withthelatter, thetaxiscollected and remitted to thegovernmentonlyonce, atthe point of purchase by theend consumer. Withthe VAT, collections, remittances to thegovernment, and credits for taxesalreadypaidoccureach time a business inthesupplychainpurchases products.
WhatdoesFair trademean ? • It’s a trading partnership , based on: -dialoque , -respect , - equality , in international trade , especiallyintheSouth. To shareproffitsfrom trade equaly.
Mainaims : • To help producers and workers in developing countries • To make better traiding conditions • To promote sustainability
In Europe more than 100 organizations participating in the market importers of Fair Trade. Their size varies from very modest, sometimes carried out by one or two committed to people, the largest fair trade organizations in the world, which is Gepa from Germany. The four largest importers organizations achieve an annual turnover of over EUR 10 million. EFTA (the European Fair Trade Association) is an association of ten Fair Trade importers in nine European countries (Austria, Belgium, France, Germany, Italy, The Netherlands, Spain, Switzerland and the United Kingdom). EFTA was established informally in 1987 by some of the oldest and largest Fair Trade importers. It gained formal status in 1990. EFTA is based in the Netherlands and has Dutch Articles of Association.
Howdoesitwork? • theimoportermustpay a minimum price for theproduct and thehigherpricegoes to theexporter • thehigherpriceiscalledthesocialpremium • socialpremiumsupportsprojectsineducation , health and recreation
‘Big four’ farir trade importersin Europe - Gepa (Germany) - 40 million- CTM-Altromercato (Italy) - 30 million- Fair Trade Organisatie (Netherlands) - 18 million - Traidcraft (UK) - 15 million
Most exported products are: • Handicrafts, • Coffee, • Cocoa, • Sugar, • Tea, • Freshfruits, • Chocolate, • Flowers, • Gold, • Honey, • Cotton, • Wine.
Free and fair trade in Poland • The EU is Poland's dominant trade partner accounting for 60% of its imports and 80% of its exports. Neighboring Germany is by far Poland's most important trading partner, accounting for a quarter of the value of Polish trade. Most Polish imports are energy and capital goods needed for industrial retooling and for manufacturing inputs, rather than consumption goods. Similarly, its major exports are cars, machinery, furniture, and iron/steel products. Poland, a member of the World Trade Organization (WTO) and the European Union, applies the EU's common external tariff to goods from other countries--including the U.S.
Opportunities for trade and investment continue to attract investors from around the world into all sectors. The American Chamber of Commerce in Poland, founded in 1991 with seven members, now has more than 300 members. Strong economic growth potential, a large domestic market, tariff-free access to the EU, and political stability are the top reasons U.S. and other foreign companies do business in Poland.
