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SELECTION OF A EXPORT MARKET BY IRELAND

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Added on  2020-03-16

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SELECTION OF AN EXPORT MARKET BY IRELAND 9 SELECTION OF AN EXPORT MARKET BY IRELAND Name Institution Tutor Course Date of submission Word count (2037) Introduction Ireland is one of the 28 members of the European Union (EU). Policies developed by EU allows the involved countries free movement of capital, people, goods, and services within the internal market. The exit of the United Kingdom (UK) form the EU, had a significant economic implication to the Ireland as well as other

SELECTION OF A EXPORT MARKET BY IRELAND

   Added on 2020-03-16

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SELECTION OF AN EXPORT MARKET BY IRELAND1SELECTION OF AN EXPORT MARKET BY IRELANDNameInstitutionTutorCourseDate of submissionWord count (2037)
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SELECTION OF AN EXPORT MARKET BY IRELAND2IntroductionIreland is one of the 28 members of the European Union (EU). EU is an economic and politicalunion which consists of 28 members located primarily in Europe. It has united all the memberstates through the creation of a single internal market. EU has developed a standardized systemof laws common to all the members hence allowing them to trade freely. Policies developed byEU allows the involved countries free movement of capital, people, goods, and services withinthe internal market. The exit of the United Kingdom (UK) form the EU, had a significanteconomic implication to the Ireland as well as other EU members at large (Doherty et al., p. 4).Withdraw of UK from EU is commonly known as Brexit. Brexit did not only have an impact onother member countries but also in UK’s economic growth. For instance, it was estimated thatthe UK’s GDP would decrease yearly, between 1.3% to 5.5% in the short run. In the long run, itwould lower the GDP between 1.2%-7.5%. Once the UK withdrew, the impact was felt at onceglobally. The pound for instance, at one point depreciated by more than 10%. This was thelowest point that the pound had reached for over 30 years (Kierzenkowski et al., p. 9). Brexitcaused various uncertainties in the global market, some which could have a lasting long-termeffect. This paper, therefore, discusses factors and processes that an Irish based company shouldconsider and implement in the selection of an export market.Factors for an Irish based company to considerIreland was affected largely by the UK withdraw from the EU as compared to other members.These two countries had a close trade relationship for a long time, and, therefore, UK existtriggered a lot of structural changes which left Ireland’s economy so vulnerable. As such, Irelandhad to reorganize itself and strategize carefully on how to choose an export market.
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SELECTION OF AN EXPORT MARKET BY IRELAND3Tax competitionFor successful trade relationship between countries, it is important to understand taxation ratesinduced on goods and services. The subject of tax competition is the most significant policyissues that surround public finance matters in various unions in the world. Different nations havebeen known to compete for mobile investment, and this leads to a competitive race towards thebottom in taxes (Davies and Voget, p. 5). The result of such unhealthy competition makescountries to under-provide public goods and also distort firm decisions. While the EuropeanUnion provides free trade barriers for it members, they have resulted instead in theintensification of tax competition. With increased globalization, the ability of countries to sustaintax revenues is diminishing with time. When countries join EU, they are known to reduce theirtax rates. However, Crumley (2004:3) believed that it’s not prudent for countries to cut downtheir tax rates while at the same time asking for aid from other countries. EU members show hightax competition as compared to non-members. When one reduces its tax rate, other respond morecompetitively. It is crucial, therefore, for Ireland to identify a country that has constant tax ratesto avoid inconsistent fluctuations which can affect their trade relationship. Ireland enjoyed agood relationship with the UK due to their proximity. According to the weighting by distancescheme, proximate countries’ taxes usually have greater importance as compared to distant ones.Weighting by GDP on the other side indicates that larder countries taxes matter more ascompared to smaller countries. It is also essential for Ireland to consider a vast nation since theyare known to be profitable due to numerous consumers. By the fact that the consumers can beserved locally, it helps them to avoid trade costs. Additionally, countries which can access othermarkets easily should be the best option due to their export platform capabilities.
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