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What are Trade Agreements
2 or more countries agree on the terms of trade between them.
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Examples of what Trade Agreements Cover
Tarrifs, Duties and Taxes
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How many types of integration are there?
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What's a PTA
Preferential Trade Agreement - Tariffs are lowered though not eliminated between friendly countries.
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What's an FTA?
Free Trade Agreement - No Internal Tariffs, each country maintains their external tariffs. Elaborate 'Rules of Origin' must be created to stop Arbitrage.
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What's a CU
Customs Union - Same as an FTA but with a common external tariff. This requires a degree of a political economy as it needs each country to discuss and agree on the external tariff. A CU could lead to trade diversion over trade creation.
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What's a CM
Common Market - This is the same as a CU but with the free mobility of labor between countries.
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What's an EU? (Integration)
Economic Union - Same as a CM but with the harmonization of economic policies. This is also known as a single market.
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What's an MU?
Monetary Union - Same as an EU but with a Common Currency and Central Bank. example could be the central bank
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What are trade agreements trying to achieve?
Comparative Advantage, increase GDP, More Choice, lower prices, diversity risk, more competition, permissible under WTO, reduce domestic lobbying, power of larger counties in the world, create power trading bloc.
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What are the problems with Supra-national governments? (EU) (4 Answers)
1) Poor accountability mechanisms to national governments. 2) Most decisions taken by council of ministers, but made in advance by EU officials. 3) Time consuming building consensus. Policy evolution and policy lags. 4) Openness to lobbying.
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What has the EU done to promote CSR in the 2001 Green Paper'? (5 Ans)
1) Enhance visibility of CSR. 2) Improving and tracking levels in trust in business 3) Improve self- and co-regulation. 4) Enhance market rewards for CSR. 5) Integrating CSR into education, training and research.
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What was included in the 2011 EU policy on CSR?
1) Emphasizing the importance of national and supranational CSR policies. 2) Better aligning of European and Global approaches to CSR. Emphasizing and promoting Using OECD, UN, ILO & ISO. Report to be published mid 2014.
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Criticisms of EU approach? (4 Ans)
1) EU views CSR in the context of social rights, citizenship and welfare. USA views from the position of economics arguments. 2) Its voluntary 3) Overly focused on the process. 4) Commitments to CSR are overshadowed by Trade agreements.
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How does EU respond to these Criticisms?
1) CSR is most effective when voluntary/ linked to company performance. 2) Standards and measures are important to verify CSR performance. 3) Partnerships are very important to influencing company behavior.
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What is the EU's view on Trade and Tariffs?
1) Wants to create a fair and open trade. in conjunction with the WTO. 2)Access to markets for European companies, workers and investors. 3) Make sure others play by the rules (IP rights). 4) Ensure trade is force for sustainable development.
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Why implement protectionist measures? (4 ans)
1) Protect Domestic Employment. 2) Protect consumers. 3) Infant Industry argument. 4) National Security (e.g. not selling arms to every country).
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Problem with protectionist measures?
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Why does the EU want trade agreements? (4 ans)
1) Reduce barriers to trade. 2) Neutralize potential trade diversion. 3) Create strategic links with countries experiencing high growth. 4) Enforce international trade rules.
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Who determines EU Trade Agreement Policy?
Trade Directorate, all members of the EU, pressure from special interest groups.
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How many lobbyists/people working in lobbying in Brussels
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Criticisms of EU Trade Policies (4 ans)
1) Insufficient democratic oversight ( lots of agreements made in secret). 2) lobbying. 3) Cost of monitoring, auditing and verification. 4) Codes of conduct can be difficult to follow (Bureaucratic)
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Criticisms of the India - EU Trade Agreements.
1) Most of negotiations in private. 2) Allegations that businesses are being granted access to the negotiators. 3) who benefits from new treaty? not immediately clear.
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What is the EU - India Trade Agreement called?
BTIA - Broad-based Trade and Investment Agreement
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What does BTIA include? (5 ans)
1) increased market access. 2) IP rights. 3) Liberalize investment and financial services. 4) Access to raw materials. 5) Deregulation of staff movements in transnational corps.
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What is TTIP
Transatlantic Trade and Investment Partnership
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What does TTIP include? (4 ans)
1) Access to markets. 2) Service sectors in EU. 3) Health Care, finance and media. 4) Structural realignment of several major industrial sectors.
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Criticisms of TTIP? (2 ans)
1) Being negotiated in private. Heavily lobbyed 2) Investors chapter (means that corporations can take governments to court if business feels a policy is making them noncompetitive.
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What are the 4 theoretical theories towards CSR?
1) Instrumental Theories. 2) Political Theories. 3) Integrative theories. 4) Ethical Theories.
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What are Instrumental Theories?
When CSR is used as a way to make more profits. Shareholder value theory. Use CSR as a way to gain a competitive advantage.
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What are Political Theories?
When businesses are pressured into accepting social duties and participating in a social co-op. Corporate constitutionalism can be included, this is when corp powers are held in check by share/stake-holders. Society expects a certain set of norms.
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What are Integrative Theories?
Business relies of society for its survival and growth. They need to work with society. Linked to 'stakeholder management' where all stakeholders must be satisfied.
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What are Ethical Theories?
Relationship between business and society is embedded with ethical values. Firms 'ought' to accept CSR.
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What are the 3 practical theories of CSR?
CSR Theory, The Triple Bottom Line and stakeholder Theory
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What is CSR Theory?
That businesses have a responsibility to profit whilst playing a broader role in society. 4 obligations/responsibilities: economic, legal, ethical and philanthropic.
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what is The Triple Bottom Line?
Corporate leaders calculate their 'bottom line' business results not only using economics but also society and government. Each area should be looked at separately and should show sustainable results.
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What is Stakeholder Theory?
Those whose lives are affected by the business have the right to/obligation to help direct the business.
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Why engage in CSR?
Innovation, cost saving, brand differentiation, long term planning, customer and employee engagement.
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3 CSR challenges
1) Ethically Compromised Businesses. 2) Production Process is Compromised. 3) Requires Sensitive Raw Materials.
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What is Greenwashing?
Greenwashing, or "green sheen," is a form of spin in which green PR or green marketing is deceptively used to promote the perception that an organization's products, aims and/or policies are environmentally friendly
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What is wrong with CSR theories?
1) seen as a strategy to promote businesses. 2) CSR is system of self regulation. 3) Often normative/ derived from academic theories.
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What is CSR?
SR is about how companies manage the business processes to produce an overall positive impact on society.
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3 Case studies for CSR
The Arms Industry, The Textiles Industry and The Food Industry.
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Criticisms of the Triple Bottom Line (5 ans)
1) Seen as Greenwash. 2) Diverts leaders attention from core business. 3) How effective/appropriate is it? 4) Denies business freedom. 5) Is it relevant to all businesses?
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Criticisms of International Standards
1) Voluntary/non-binding. 2) Not intended to be the basis of audits/compliance regimes.
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Which 2 practical theories of CSR are commonly used?
ISO and The Triple Bottom Line.
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Whats the difference between positive and normative theory.
Positive describes what is actually happening. Normative describes what should be happening.
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Problem with the 3BL
How do you calculate the 'social bottom line'??
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Would the Arms Industry pass environmental CSR?
No - Destruction of environment but chemical and nuclear weapons. Landmines still in parts of Africa, Napalm in Vietnam etc etc.
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Would the Arms Industry pass social CSR?
No - Civilian casualties. Small arms help to support buyers who are in 'small wars' (malitias, gangs etc). Small arms increase the length of and severity of wars. Small arms are more often used in human rights violations. Child soldiers.
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Would the Arms Industry pass Profitability CSR?
No - Military Industrial Complex. Over reliance on the US military (50% of military spending). It is incredibly profitable though.
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How much is spent on the Arms Industry each year?
Approx $1.5 trillion.
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Would the Arms Industry pass Political power CSR? e.g. In this case the Arms Industry is so intertwined with Government that no real distinction can be made.
No - Historically maybe yes. However nowadays arms businesses can sell to countries all around the world. The wars fought now are not country vs country but they are fought against small groups of people. The Westphalian system is dead.
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Arms Industry and CSR Conclusion
The Arms Industry is in violation of CSR standards and should be at liability.
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Would the Textile industry pass economic CSR?
Yes, some highstreet retailers USP is their low cost clothing so they need ever cheaper suppliers.
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Would the Textile Industry pass legal CSR?
Yes/No - often production takes place in Asian countries which have outdated, inadequate or insufficient laws regarding human rights, child labor and working hours etc. Legally they are ok, but shouldn't ethic take over?
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Would the textiles industry pass ethical CSR?
No - many clothing manufacturers do not own their factories but try to ensure their suppliers commit to a code of conduct. There is no 100% guarantee that this is followed.
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Card 2


Examples of what Trade Agreements Cover


Tarrifs, Duties and Taxes

Card 3


How many types of integration are there?


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Card 4


What's a PTA


Preview of the front of card 4

Card 5


What's an FTA?


Preview of the front of card 5
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