Free Trade: A Breakdown

Many member nations of the EU act on neutrality, so the military for the EU is not very active. The EU does send troops on peacekeeping missions, but no more than around two thousand troops at a time. The goal of the European Union was to create a common market in which member countries could openly trade without concerns. The single market enables the circulation of all factors of production for the betterment of each nation. For this to happen, member states had to agree to allow citizens to travel freely, make money, and even retire in other member countries. Universal education also had to be accepted in the member countries. This means that if you had servicing and education in another member country, than it would be valid in other member countries.

In 1969, the European Economic Community first had thoughts of creating a unified currency, but it was not until 1993, when the Maastricht Treaty set a goal to have a semi-unified currency (Euro) by 1999. 11 of the 15 member nations agreed to make the Euro the main currency. 16 countries now use the Euro as their main currency. These sixteen countries have become known as the eurozone. All other European Union states are required to switch currency when their economies are deemed fit to join. Two countries, Great Britain and Denmark, however, are not bound to switch their currencies. The Euro is meant to eliminate the exchange rate, and make it easier to transport goods and services.

The Common Agriculture Policy (CAP) ensures the agricultural stability of member nations. The policy has price controls that ensure farmers to have a fair standard of living. One main problem the EU is currently facing is its dependence on foreign energy. The EU currently imports 82% of its oil, 97% of its uranium, and 57% of its gas. Russia supplies the EU with a lot of its energy, and the EU is currently looking to diversify its energy programs and policies. The EU may be best known on a global standpoint for being concerned about Earth’s environment. Every year, the EU proposes carbon dioxide emissions, scientific research on the ozone layer, research on acid rain, and research on the quality of air.

ASEAN made a breakthrough in trade when they established the ASEAN Free Trade Area (AFTA). An ASEAN Economic community is in the works, and ten countries are eager on adopting new policies to make ASEAN more affective, so it can compete with the EU and NAFTA. As of now, ASEAN does not have a unified currency, but one has been talked about for years. Each country is too dependent currently on their respective currency, so a change is not eminent in the near future.

ASEAN is run by the ASEAN Summit, which is held once a year in differing member countries of ASEAN. The Secretary-General is appointed and serves a five year term. His job is to initiate and advise ASEAN policies. ASEAN is viewed by many as the up-and-coming trade organization, since the ASEAN population already outnumbers the population of the European Union and also NAFTA. In 2007, the member countries of ASEAN had a combined gross domestic product of 884.35 billion USD. The total trade of ASEAN was 1.22 trillion USD. ASEAN has shifted their focus in recent years to providing humanitarian aid and preventing natural disasters. Most of the countries in ASEAN are prone to dangerous typhoons and seasonal storms. This has sparked the interest that ASEAN has in humanitarian efforts and natural disaster prevention.

Free trade is essential to the betterment of society because technology can not develop as fast if there are too many embargos, standards, and tariffs in place. Trading agreements are beneficial in that they eliminate numerous embargos, standards, and tariffs. Free trade increases a country’s wealth, because with less limitations, business can thrive more; and when businesses thrive, they give money and jobs to the economy.