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European Union and Its Effect Upon Cornish Businesses

Introduction

The European Union at the moment boasts of 27 member countries at the moment though more members are bound to join later this year or in the future as they are under scrutiny to verify their suitability. The EU has organized itself to serve the business interests of the member by regulating the amount of trade and business that is cried out amongst member countries and the way they relate to nonmembers in terms of international business. Rules and regulations or rather directives have been put in place to ensure fair play and make it rewarding to carry out business among themselves and make it hard for nonmembers to compete with the members in the trade block.

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In the year 2003, the EU proposed some 30 new directives that were to apply the members which were adapted in the year 2005. The British chamber of commerce is angered by the response of the UK’s Regulatory Impact Assessment (RIA) system which is responsible for advising the government on the benefits of enacting certain regulations and the impact that they are going to have either as negative or positive to doing business in the UK or with other members. It is said that a third of the Directives were enacted without consulting the UK. The problem does not lie with the EU but the UK as it’s the latter that does not give its views on how it perceives the directive and the impact it will have on the UK before they are enacted. The lack of UK’S consultation and reluctance in influencing the EU policing the UK has in the last ten years lost around £46,892 billion as a result of the EU directives and regulations.

EU directives

The Unfair Commercial Practices Directive is a major reform of the law concerning the conduct of countries and business firms in the region. Like any other European Union Directive, it needs national rules to incorporate it in each national legal system among member states although even without the incorporation, it may have some effect in national law. In general, it will be difficult to predict exactly what the impact of the directive is in a particular country without consulting the national implementing laws as the members have very different laws which are not harmonized but share similarities as facilitated by the EU directives. The directive is meant to combine high-level consumer protection with freeing up international trade in the EU and at the same time appreciating the differences in consumer protection laws in each state.

On a literal reading of the Directive, misleading or aggressive commercial practices by business firms towards consumers which would not affect his economic behavior on average terms, but would distort the economic behavior of a specific consumer class, may be prohibited. This is because the provisions refer exclusively to the “average consumer” and “exploitation of any specific misfortune or circumstance with potential to impair the consumer’s judgment, of which the trader is aware.

Competition law antitrust law

This law is as old as the organization itself as it was first brought into existence by the patent company of the EU, European Commission. It focuses mainly on four policies namely monopolies, cartels, mergers, and state aid. These policies help in ensuring a free flow of goods labor and services in a borderless Europe. Given the fact that the EU is made up of independent states, competition and the protection of the EU as a single market could be rendered useless if member states were allowed to practice patriotism towards their home countries as they wished.

Software directive

Although the enactment of this directive has been delayed by the involved parties in this industry, it is bound to have a very big effect on the players going by the level of reaction and lobbying it has drawn from the various companies in this field.

Cornwall

Otherwise known as the Cornwall Chamber of Commerce & Industry is an independent local organization consisting of businesses from various sectors aiming at improving prosperity and the competitiveness of the members against their rivals. The organization has 254 registered members falling under different portfolios ranging from financial to manufacturing industries. On more grouping criteria the organization has tertiary, secondary, and primary companies in its portfolio. This helps in the interrelations of the businesses as they tend to rely on one another in different ways which are cheaper than doing business with nonmembers.

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Primary businesses: in this grouping we expect to find companies that deal in the primary sector of the economy such as mining, farming, etc. In other terms, the industry is expected to produce products for use by other industries. The organization is lucky to portray its diversity and consideration of this aspect by having a mining company in the name of Imerys minerals. Such a company represents the basic machination of an economy that facilitates the existence and functioning of other sectors such as the service industries.

Secondary businesses; this mainly constitutes the manufacturing industry that receives their raw materials from the primary industries. In doing so, they reduce the amount of money and other inputs lost in searching for the raw materials from nonmembers as the companies have aligned themselves with serving the interests of the members first before looking elsewhere.

Tertiary business; this forms the bulk of this organization. Service providers such as banks, insurance companies, and other financial institutions are the most available as the modern world moves from the conventional forms of trade to the newer modes to fit the changing times and trends in businesses. Some of the famous banks as Barclays Plc. are members of this organization.

Tridion Software in the EU

As an international software development company, this company is faced with having to adapt to various laws and regulations that apply in the relevant countries of operation. In this case, the company has the advantage of operating closer to home in the case of the EU as the parent company is in the UK. Though competition exists among the members of the Cornwall Chamber, a strict code of business behavior and proper practices is upheld. This is something that has been held with a lot of respect as witnessed recently with the fining of the American software company Microsoft for violating the EU competition law that touches on all businesses despite the service or goods involved.

Implications in operation in the EU

The unfair commercial practices directive has in recent years drawn a lot of attention following the fining of the giant American company Microsoft. Though previously charged in 2001 in America and surviving the onslaught, the company was not lucky this time round as it was in 2003 charged with not adhering to the said law by allowing itself to monopolize the software industry in the EU. This was by way of introducing the Microsoft Media Player which plays music and video clips as a free add-on to Windows. The add-on was however not compatible with other software that has no media player. The EU gave Microsoft 90 days to make available a European version of its Windows operating system to PC makers without a media player. Such an implication on Tridion Software deals it a good fortune in that with the availability of the free software coding system its competitiveness and further expansion in the IT sector is boundless.

The second directive called the software directive has received a lot of condemnation from software manufacturers saying that it denies them free and fair operation in the EU market. The directive in the long run will favor the big software companies such as Microsoft and Disney that have been in operation for a long while it will disadvantage new entrants such as Tridion. The directive allows EU software companies to re-engineer their competitors’ products to produce competing products with higher compatibility.

Implications of Euro use in trade

Since the introduction of the common currency in the EU, some arguments have been brought forward to support or argue against such a move.

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At first, the Euro was intended to eliminate the issue of foreign exchange transaction costs incurred by business firms of the member states. The participating businesses have so far praised the move as in an actual sense the cost of doing business across the borders went down.

The creation of a single market that uses the same currency has also benefited business firms and enhanced the business environment.

Another point is that it would create a single capital market in debt and corporate equity which should result in greater efficiency in capital allocation along with greater liquidity. In this context, we could expect that the predominant financial center in Europe, namely the city of London, would consolidate its position regardless of whether the UK is using the Euro or not.

Maintaining the stability of a currency in a single market would facilitate the flow of investment and consequentially introduce a uniform direction in economic growth in the region.

Regional funding

The UK is deemed to be the main financier of the EU. However, the admission of poorer Eastern European countries into the union has reduced the amount of money available to the major donor for the development of her country. In the last few years, the funding to the UK has reduced drastically. With the decreased money for funding, some areas in the UK have been technically disqualified to receive funding from the EU. Lucky enough, Cornwall County together with its Cornwall Chamber of Trade continues to benefit as the present administration considers the area still poor enough to deserve the regional funding from the EU.

In giving out the funds the EU divides the areas into fields of application.

In Convergence regions:

  • Innovation and technology
  • Environment conservation/risk prevention
  • Accessibility
  • Infrastructure
  • Human resources development
  • Administrative capacity

In Regional Competitiveness and Employment regions:

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  • Innovation
  • Environment/risk prevention
  • Accessibility
  • European Employment Strategy such as fighting illegal immigration

Economic profile Cornwall

Some years back, the Cornwall region was considered not eligible for this kind of funding. However, this view was reversed in 1999 when it started receiving funding for the first time in history. This however does not mean that the region received no funding in its entirety but it received it as a unified entity different from the inclusion of the Devon region where the pair was considered s one under the name Devon wall. Historical factors and agricultural endowment were some of the factors that influenced its consideration for funding. Again the region boasts of a unique culture that gets loads of tourists traveling in that direction. Fishing and agriculture though in smaller intensities than before continue to contribute to the advancement of the region’s economy. Mining of tin and copper used to take place but has been overtaken by events with the minefields being left open and only retains the title of heritage area granted in 2006.

Funding from the government and EU has uplifted the economic status of this region to include all kinds of industries and newer ones such as web design, product design to mention but a few. However, the trend in funding this region by the government is reversing. This is generated by the fact that the amount of taxation obtained by the government on businesses in the area and the locals are not plowed back into the same area. Economists have called this fiscal raping of a hapless region. It was noted in 2001 that the treasury extracts 1.95 billion pounds from the region out of the GDP of 3.6 million pounds and returns less than 1.65 billion pounds (Business Age Magazine 2001). This trend of events has led to calls for devolution to follow the example of Scotland where both London and Scotland are benefiting. The geographical disposition of Cornwall is blamed to be the main causal effect for such a ”backbench” placing by London.

Funding in the UJ

As said earlier the devolution of states from the UK as portrayed by Scotland is the only way forward for Cornwall as a region that has for so long endured the abuse and exploitation of London. The establishment of a Cornish Assembly should be the first step that will ensure the enacting of laws that will encourage the economic advancement of this region. Further steps should be aimed at making Cornwall an independent member of the Union Jack. This will ensure that Cornwall receives funding from the UJ without the withholding and confirmation by London. This will also ensure that the region retains its tax collections for her growth and development.

Pan-European export

With the growth of economies and especially ones from the Eastern block that was recently admitted into the Union, competition among businesses is expected to escalate to cutthroat levels as new markets in Europe get saturated. It is therefore imperative for business firms and EU members to form a system that will complement their export business attempts as an individual but to a more inclusive unitary force composed of the members alone.

In doing this we highlight the recent venturing by Tridrian into Australia where the firm is developing software for a bank. The firm has to be wary of new business regulations in the new country to stay within the legal provisions.

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StudyCorgi. (2021, October 15). European Union and Its Effect Upon Cornish Businesses. Retrieved from https://studycorgi.com/european-union-and-its-effect-upon-cornish-businesses/

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StudyCorgi. (2021, October 15). European Union and Its Effect Upon Cornish Businesses. https://studycorgi.com/european-union-and-its-effect-upon-cornish-businesses/

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"European Union and Its Effect Upon Cornish Businesses." StudyCorgi, 15 Oct. 2021, studycorgi.com/european-union-and-its-effect-upon-cornish-businesses/.

1. StudyCorgi. "European Union and Its Effect Upon Cornish Businesses." October 15, 2021. https://studycorgi.com/european-union-and-its-effect-upon-cornish-businesses/.


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StudyCorgi. "European Union and Its Effect Upon Cornish Businesses." October 15, 2021. https://studycorgi.com/european-union-and-its-effect-upon-cornish-businesses/.

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StudyCorgi. 2021. "European Union and Its Effect Upon Cornish Businesses." October 15, 2021. https://studycorgi.com/european-union-and-its-effect-upon-cornish-businesses/.

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StudyCorgi. (2021) 'European Union and Its Effect Upon Cornish Businesses'. 15 October.

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