A. European Union
The European Union (EU) is an economic union of 28 member countries formed in 1993 by the Maastricht Treaty; the purpose of this union is to eliminate trade barriers and to allow free trade between the member countries which are mainly located in Europe (Gabel, n.d.). The formation of EU has supported the trading relationships and interstate dependency. It has also eliminated all types of trading tariffs and implemented a common currency i.e. Euro (Amadeo, 2017).
European trade is considered as one of largest and strongest trade in the world. Commodities such as machinery, vehicles, iron and steel, aircrafts, meat, dairy products, pharmaceuticals and other chemicals are the major exports of the EU member countries (Economy Watch Content , 2010). Statics have shown that the value of EU exports rose for most of the products between the year 2012 and 2017. The export of tobacco, drinks, and food is the highest as it increased by 22.9%. It is also seen that the export of transport and machinery equipment and chemicals increased by 12.2% and 20.8% (Europa, n.d.).
On the other hand, countries of the EU import many products such as vehicles, machinery, crude oil, plastic, chemicals, textiles, metals and food products (Economy Watch Content , 2010). Statics has shown that between the year 2012 and 2017 EU’s import of lubricant products and mineral fuels have decreased by 38.2% also imports of raw materials decreased by 3.3%. Alternatively, imports of transport and machinery equipment, food and tobacco increased by 31.3% and 20.3% (Europa, n.d.).
BRICS consists of five major developing economies that are Brazil, Russia, India, China and South Africa (Genius, 2018). According to the BRICS trade relations report, the contribution of these nations in global exports and imports amounted to USD2902 billion and USD2339 billion (Genius, 2018). The countries contributed to 18.2% to the global exports and 14.6% of the global imports. Countries under BRICS are known for the production and export of petrochemicals and energy products, automobiles, technology, fertilizers, textiles, precious stones, metals and military machinery. They are also known for competing in the service sector such as Tourism, Real Estate and Healthcare (Genius, 2018). China has been determined as the largest trading nation both in terms of exports and imports among the BRICS countries; China is also the largest exporter of products in the world. Brazil focuses on the export of luxury goods and Russia has decreased its dependency on commodities by developing high technology sector and opening opportunities for businesses. Amongst BRICS member countries; the import from India is considered as cheapest and in bulk (Genius, 2018).
BRICS imports include, pharmaceuticals, plastic, iron and steel, copper, food, electrical equipment, vehicles and crude oil (Genius, 2018).
The GCC consists of six nations that are UAE, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain. The European Union is the largest trading partner of GCC which accounts 11.7% of the trade balance. The GCC countries export mainly oil, gas, aluminum, textiles and other related products (Oxford Business Group, n.d.). The countries import technological products, machinery, vehicles, precious metals, pharmaceuticals, chemicals, food and other products.
The steps that should be taken by the GCC for becoming a potential regional trading block are as follows:
• GCC should think of manufacturing and exporting technological products that can make the trade in GCC like trade in EU.
• GCC should consider manufacturing and exporting luxury products, pharmaceuticals and fertilizers that can make the trade in GCC like trade in BRICS.
• GCC should think of implementing flexible trade rules and regulations, just like EU and BRICS. For example, tax relief, eliminate duty.
Task 2: (CLO4)
a. “The major facilitator in the movement of Production or Business factors is Technology.” Justify the above statement by analyzing two real life examples.
Technology has changed the business process of the organizations. The technology advancement has provided both intangible and tangible benefits to the organization. The technology infrastructure has supported the efficiency, relationships, and culture of business organizations. For example, various technologies are used for communicating effectively, carrying out the operations efficiently and increasing the production capacity. Employees and business owners are able to interact with customers clearly and easily through different communication channels such as websites and phone applications. Technology has also enabled to use advanced software for tracking accounts and managing information (oksbdc, n.d.). Machines supported by advanced technologies are used by organizations in manufacturing processes to increase the production capacity and to reduce cost and man hours. Additionally, different technological devices and equipment are used for controlling processes. The introduction of mobile phones, laptops, tablets, and gadgets have enabled organizations to manage their operations, information and other work processes. Many large organizations are carrying out their production process through machines that can even directly communicate with each other. Organizations are using technology for improving their business processes.