Global Circulation: UK as a Bridgehead

The UK's membership in the EU has made it an attractive location for non-EU businesses seeking to enter the EU market through Foreign Direct Investment (FDI). However, the UK's decision to leave the EU has raised questions about its attractiveness as a potential location for FDI. Prior to Brexit, the UK was a top destination for FDI in Europe, with over 217,000 jobs created and an estimated £20.9 billion worth of investment. The UK's exit from the EU may lead to restrictions on companies operating in the country and could result in some companies downsizing or exiting their operations. Despite this, the UK government can increase its attractiveness by increasing innovation for FDI companies and promoting easy penetration into the market. However, the post-Brexit landscape is uncertain and investors will need to navigate changing trends, including technological advancements and corporate competitiveness.

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Part A:
Explain the benefits and costs of globalization from the perspective of a specific (named) business.
To support your analysis, you should obtain data and information from the published reports and accounts
of the business you have chosen.
Globalization is exploring new avenues and world regions in terms of developing growth. It is a way
through which the various organizations are ready to embark and integrate international economies by
inculcating in their culture and economies. The globalization has made the various organizations
successful due to their exploration of a new territory. The successful organization such as Mc Donalds,
IBM, Google, Microsoft etc.
While accounting globalization in an Economics
 The various MNCs operate on a global scale, along with connecting through the satellite offices
and working in remote through the branches operating in numerous locations (Tomaney, 2017).
 It has been duly noted that the various outsourcing can add a value in an economic development of
any developing or underdeveloped country, due to employment opportunities.
 Some organization such as the Volkswagen, Audi can use other countries as an assemble countries
while being manufactured and produced in the countries such as Japan, Germany, or Korea.
 For the globalization, the Free World Trade Organization helps and ensures a fair world trade.
 It has been seen that the European Union which includes an integration of 28 countries both
economically and politically which are centrally located in Europe.
 Additionally, the North American Free Trade Agreement (N.A.F.T.A.) which is the main essence
part of the North America.
 It has been seen that the branded shirts which are been sold in the United States can be made and
produced in the areas such as China due to the cotton produced or be made by the employed
workers in Thailand. Along with this, the other countries can help in shipping while other can
market it.

 Statistically it has been seen that the McDonald's in Japan due to the globalization has a
tremendous growth in globally.
Integration of the cultures with Globalization
 Due to the globalization, it has made possible to find new trade routes such as Silk Road which is
a trade path in between the China along with the areas which come near to Mediterranean Sea area
(Haynes, 2017). Due to this, there has been an exchange of trade in terms of goods, along with the
culture and knowledge.
 Due to globalization apart from the culture mixes it has also resulted in the underdeveloped and
developing country to reap economic benefits.
 Due to the globalization, the various countries has shown acceptance and transition in the food
culture such as Butter chicken in America or Sushi been eaten in another part of a world.
 Globalisation has also made possible in showcasing various television shows and channels
globally (Vickers, 2017).
Penetration of Globalization in Technology
 Because of globalization and cultural mixes the technology has radically evolved to the global
level such as an internet.
 Various global sources of News channel and knowledge for e.g. BBC
 Globalisation has made it possible for the phone connections.
 Various environmental treaties such as Montreal Protocol to control Ozone layer and its
implications.
For example, if we take in-depth about the Mc Donalds started as 1 normal restaurant in the America,
today it has expanded to every country and every part of the region of such countries. There are globally
120 countries and territories which serve around 68 million every day (Dörry, 2017). The number of
restaurants eis 37000+ world wide and it has employed approximately 3.75.000 people. Globalisation has
made it possible for the various food restaurants to be culturally accepted in the various parts of the
regions. The fast food burger chain is able to reap economies of scale and has profited due to this to a

great extent. Today, due to the globalization people are aware of the Mc Donald brands and can know the
food menu. Mc Donalds has penetrated into various under developed and developing countries due to
which it has given employment opportunities to lakhs of people. Due to the employment opportunities,
these people have a more demand for other things. All the monetary gain and profitability has further
expanded the purchasing power within the economy (Dobbins, 2017). This purchasing power and the
food industry has further contributed to the GDP of the specific country. All this is a global circle which
penetrates within a country economy making it grow along with utilizing its resources and growing
simultaneously. The other examples such as IBM which is an IT company, Volkswagen an automobile
company is all driven by a know how techniques and knowledge which are expanding into various
countries due to the globalization. It has reduced international poverty and has added to the profitability to
the companies and the corporation.
Part B:
The UK’s membership of the EU has attracted many non-EU businesses wishing to enter the EU market
through FDI to benefit from 'indigenization'. The UK's decision to leave the EU has made this
attractiveness questionable.
With the aid of examples:
Critically analyze the main advantages/disadvantages of the UK as a potential location for non-EU
businesses wishing to enter the EU market pre-Brexit, and;
It has been seen based on the several reports that the EU was the center of destination for the British
goods exports. If we include the trading links of the various countries with the EU set up as a part of the
free trade agreement due to which the UK freely enjoys trading would result in the approximately 63% of
the UK goods getting affected due to this membership and the setup. The advantage to the other EU
countries which see it as a favorable opportunity with the UK exiting the FTA as well and there is a close

proximity of establishing the commercial arrangement. The UK faces tariffs as it is implied as most
favored nation rules will have a balancing effect. The exporters would face a rise in costs due to the
complacent with the EU rules (Beech, 2017). It is observed that the UK would be slightly impacted due to
the falling tariffs, a decline in manufacturing and EU low importance due to the global turbulence such as
immigration, refugees, Greece bankruptcy etc. Britain can also bring in the unilateral free trade policy
with the other Non-European countries and it can have better dealings. They no longer have to approach
the EU bureaucratic system. Tariffs imposed on the goods exports by the EU have low implications in
comparison to the competitiveness and utilization of cheaper inputs. It is forecasted that the implications
of the Brexit leaving the EU in the long terms, will have a lower impact on the UK would be able to
negotiate the trade agreements freely.
Explain how this situation has changed in light of the UK’s decision to leave the EU.
Due to the UK’s decision to exit the EU united treaty, initially, will have serious repercussions as the EU
will impose a harsh treaty. Brexit also has a tendency to make financial markets more vulnerable as the
Eurozone have more political will to strengthen their European monetary gains (Batsaikhan, 2017). The
openness to view the trading regime, many Non-EU nations consider the EU zone as a bigger global
place, which has a single treaty to deal with instead of going into the 28 segregated individual countries
treaties. As the EU is well connected with the world through the modern transport and communication, it
has helped in establishing a better connectivity and easy in trading. Europe is the world’s largest exporter
of the manufactured goods and services and has the central point of exports of 80 countries. As of now,
EU contributes 16% of the world imports and exports for the 28 countries along with it, hundreds of
millions of Euros of traded exports and imports daily contribute to rising EU economy (Asongu, 2017).
Due to the ever increasing trade contribution, it has attracted the job opportunities and tremendous
economic growth, as a result more none EU countries would like to enter. Fair rules, sustainable
development has attributed to the EU global treaty success. With the exiting of the Britain from the EU,
the EU trading has not much affected due to the strong designing of the free trade, elimination of no tariff
barriers, low costing to customers along with higher jobs and more income. The UK government on the

other wishes to balance the UK economy with the desire to balance the economy and the refugees,
immigrations issues etc. It is evident that the EU is the central point for the 28 countries trading every day
while the UK market is the single market with certain restrictions or barriers in treaty or trading.
You should consider the attractiveness of the UK as a bridgehead to the ******open markets in the
context of several different known-******opean businesses such as, but not limited to, Toyota, Tata, and
Pfizer.
As per the pre-Brexit statistics, the UK has been a top FDI destination within the Europe region due to
which has resulted in the 217,666 jobs created (Ansari, 2017). For the 2015 statistics, UK secured an
estimated of 1065 FDI projects which are equal to the 20.9% of the total EU due to which there was a
creation 40,000 jobs. Due to the UK exit from the EU, the FDI companies might face restrictions and
would seamless would lose the opportunity to deal with the EU market freely. It is also estimated that
some companies, including financial companies, would have to downsize, reshape or exit within the
operations as a repercussion of the UK exit from EU. The UK attractiveness will certainly get impacted
due to the Brexit. But if the government increases the inventiveness for the FDI companies to operate and
penetrate easily, it would have a competitive advantage. But the FDI companies need to battle with the
diverse trends which include the technology changes and the corporate competitiveness. The EU has a
slight unstable political and business climate in comparison to the UK government (Banerjee, 2017).
Also, the EU faces a global instability and the potential fragmentation of the Europe is the potential risks
which are faced by the investors.

References
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Perceptions, Misperceptions, and Realities.
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Banerjee, S. and Chowdhury, A.N., 2017. Globalisation of Pesticide Ingestion in Suicides: An Overview
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Dörry, S., 2017. The geopolitics of Brexit, the euro and the City of London. Geoforum, 85, pp.1-4.
Haynes, J., Hough, P., Malik, S. and Pettiford, L., 2017. World Politics: International Relations and
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Tomaney, J., 2017. The UK Regional-National Economic Problem. Geography, Globalisation, and
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Vickers, J., 2017. Consequences of Brexit for competition law and policy. Oxford Review of Economic
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