[Essay] FREE MOVEMENT OF GOODS

While costs of the transportation and distribution of goods and products are increasing, it is not without a solution. Development and implementation of cost reduction strategies in overall logistics systems in global businesses is needed in order to combat increasing costs. But costs in global trading and movement of good is not the sole thing that hardens the business process in international setting but also the different laws of countries in which international businesses where operating. Although the strategies can help, a large factor is also contributed to the kind of management and government laws that is involved and running in the business process. Without good management and evaluation or trading laws of countries involved, the best strategies would still be useless.

For instance, the core of the creation of the EU is found on the realisation of an ever closer union among the citizens of Europe, in fields of economic activity like agriculture and movement of goods, guidelines of competition procedures, free movement for employees and services, and the removal of trade restrictions (Wallace, 2000). A more obvious presentation of the general goals of the union is expressed in the preamble of the Maastricht Treaty stating the desire to create a continuance of the development of “ever closer union”, financial and monetary unification, as well as the creation of a single currency, general citizenship, familiar foreign and defence rules, and the improvement of the democratic utilities of community institutions. To a certain extent, these objectives seem to show itself largely on the trade policies implemented by the union.

One of the foundations of the trade policies of EU is the liberalisation of trade among the member countries. This means not only the free movement of goods but also a significant lowering of the trade barriers present in a particular member nation. A study of the World Economic Outlook (2002, 65) indicates that countries engaging in multilateral liberalisation measures tend to provide “larger gains” on both poor and rich countries. The same study indicated that “aggregate welfare gains” of over a hundred billion dollars is possible for countries implementing such trade policies.

In the EU, the development in the area of services initially has been rather sluggish particularly in the context of the liberalisation policies of the union. However, the emergence of the General Agreement on Trade in Services tends to augment this slow pace. On a personal note, this may have been rather beneficial for the member countries in the union provided that it opens a new window of opportunity with regards to acquiring competitiveness in the international scene. This may well be apparent in the case of Poland which was forced to improve its telecommunications sector to improve its “overall international competitiveness” (Feltham, 2000, 147). This shows that the liberalisation policies held by the union has some positive effects on its member countries. In the case of Poland, the lawmakers were compelled to work on reforms to improve the existing legislation regarding its telecommunications.

Actually, the idea of neoliberalism also play significant role in the free movement of goods in the market considering that it is a universal attribute that strengthen and broaden a freer movement of goods, services, and resources between people and nations. The key to survival of any nation or state is economic competitiveness. The Neoliberalism’s purpose of a pure market necessitates the withdrawal of regulatory controls and measures to investment, capital flows, and market transactions. It views the market as a self-regulating body capable of achieving balance through the continuous exchange of goods and services between consumers and sellers.

Neoliberals believe that the government should not function to impede the free flow of market arrangements. A free market for the Neoliberals does not require collaboration with the state and government to maintain spontaneous commerce and allocation of societal resources. People and enterprises are unconstrained by the state to engage in barter and to improve their standard of living. Its idea is that the government’s responsibility is only to supply the needed structure in promoting social rights. The government has no direct influence on economic affairs and should not spend on social services and public benefits.

The four areas of Neoliberalism which have helped shape social policy are efforts to minimize taxation especially on high earners; efforts to transform public entities into private organizations and endorse private social expenditure on social services such as health care, education, and social insurance; mass unemployment to hinder extreme inflation; and reconfiguration of public services to give opportunity “for profit” finance and investment.

References:

Feltham, J., 2000. "Polish Communications Law: Telecommunications Takes off in Transition Countries but at What Price Are They Becoming Wired?"Vanderbilt Journal of Transnational Law. 33(1), 147.

Wallace, H., 2000., Policy-Making in the European Union. Oxford University Press. Oxford.

World Economic Outlook. 2002. "Essays on Trade and Finance." p 65