Is the EU too Regulatory and Bureaucratic?

1854 words (7 pages) Essay in International Relations

06/08/19 International Relations Reference this

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It is often argued that EU is far too regulatory and bureaucratic. Outline and evaluate this claim.

This essay will examine this question by exploring four main factors. These are; business-friendly factors, where we will see what the EU does to protect businesses operating within it. Secondly, consumer-friendly factors, what it does to protect the consumers purchasing goods in the EU. Thirdly, do these laws damage new growing business within it. Lastly, can these types of regulation work outside the EU. On this basis, this essay will conclude that in some respects EU regulation are beneficial and, in some respects, harmful. EU is one of the biggest distributors of manufactured goods and services, therefore has rules and regulations for the trade that goes on within it. It is often argued that EU is far too regulatory and bureaucratic because of the nature of the laws it has established to protect businesses and the people within it. It is claimed that these laws established by the EU can only work for EU and other developed countries. This essay will conclude that the EU protects some business via regulation and inhibits others. EU is often seen following Neo-Liberal ideas in its politics but it can be argued that it is losing its liberal nature with its regulatory and bureaucratic nature.

With reference to the first and second main factor Europe has a single market means that it has a few trade barriers between its members this means that goods can move freely across the EU all allowing its producers to sell its products for the highest selling price and the consumers to purchase goods at lower prices and still have a good quality products also allowing other businesses to find the better quality of products for a reasonable price from any part of the EU creating and filling market gaps giving opportunity to businesses that are trying to expand. These small businesses in the EU are being protected by the EU competition laws which set out laws on competition and what is seen as unfair business practices. For example, businesses can’t fix prices meaning that there’s a certain rate for a product to be in the market. Therefore, these businesses are not allowed to go below it. EU also makes sure that the products produced by the manufacturers meet with the standards laid out by them and any product that fails to meet the basic standards are not allowed to enter the market. Besides having laws on competition, it also protects employee rights with its equal pay act or other health and safety laws which provides a healthy and safe working environment. EU has often been criticized for its highly regulated laws. Since these types of regulated laws are only seen in the EU many foreign countries see it as unnecessary especially by world powers like America who have soft trade regulation.

America’s soft nature has to lead to many market leaders to exploit their positions.  For example, Amazon in America is often accused of exploiting smaller businesses growing within it or the businesses that are similar to them by nature. For example, the online diaper company is an example of them misusing their power as a market dominator it is seen trying to be a market monopoly by acquiring many positions as it can in the online shopping industry and the web industry even beating Google in that process. CEO Jeff Bezos doesn’t fear of spending money to make Amazon the market leader just like he did with diaper.co. it wanted to acquire the company, but the owners refused to sell the company, therefore, Amazon decided to sell diapers half the price attracting most of their customers towards them and forcing the owners to sell the company. This is not the first time that Amazon has done something like this it has also tried suppressing businesses operating within it. America doesn’t have those strong regulatory regulations like the EU therefore many businesses can misuse their powers which they wouldn’t be able to do in the EU. Amazon also faced these allegations in the EU by its Competition Chief Margrethe Vestager asking them to submit their data she also accused them of using that data from its smaller rivals to gain a bigger share in the online trading market. They also contacted businesses who operate via Amazon so that they have a strong case against them.  Any business misusing its powers has faced huge fines referring back to my first and second factor making the EU a place where manufacturer and consumer can operate together on fairly protected grounds of trading.

With reference to my third factor, it is often argued that these laws are seen tough for the smaller businesses who are growing. They don’t have much capital to invest into the existing or new laws created by the EU. For example, data protection laws can be incorporated by companies like Facebook as they can easily have the capital to implement it, but small companies find it hard and may face major financial issues or lose their business completely. Referring to my final factor It is often argued that these laws can work successfully in EU as it is mostly made up of developed and economically strong countries. If Asia establishes laws like this, it is more likely to be failed as they are all underdeveloped and economically weak countries who depend on foreign countries for employment, for example, many international businesses like Primark and GAP have their warehouses in Asia since they can provide them with cheap labour without needing to provide them with other facilities as an employee will have in the EU allowing the businesses to increase in their profits . For example, Primark has their warehouse in Asian countries like Bangladesh and India allowing the company to produce clothing for cheaper prices as these countries don’t have any outlined minimum wages meaning they can pay them any wages they want to. Primark pays £0.60p an hour for its employees working in the its sweatshops saving them £6.90p per employee every hour by employing £11 Million. This allows them to sell these items to consumers at a much cheaper price making them profits. Making Primark the market dominator in the UK clothing industry with the total of 5.5 billion worth of profit in 2017 making its net worth £24 billion according to the figures produced on its website at the end of the fiscal year.

 Many brands, for example, Amazon has their call centres in Mumbai India employing its large population who are willing to work extra hours for less than the minimum wages here in the UK providing a large boost in its economy by bringing in at least 6 Billion Dollars every year. Having so many laws prevents countries from growing and causing unwanted disputes with other world economies, for example, USA has often accused the EU to protectionist as it is often seen getting involved in the business activities carried out by its members. Apple.co-operates through Ireland and contributes majorly to its economy but the Eu has filed a case against Apple for not paying proper taxes and forcing Ireland to carry on with this argument whereas Ireland doesn’t want Apple moving into other economies who would let them work freely without any questioning. Besides controlling the trade EU also tries controlling individual choices for article 13 which is a copyright legislation created to protect online content but at the same time it threatens everyone who is working in the creative industry as it will restrict content already in the EU or new content blocking any type of content that is doubted to be somebody else’s unless proven.

In conclusion, EU is seen to be tough, it is protecting the rights of businesses and those involved it. If EU had trading laws as America everyone wouldn’t have the same opportunities and lifestyle they have. EU protects employees making sure everyone gets treated equally even though with minor failures like Sports direct in the UK where it was seen exploiting its employees by paying minimum wages and forcing them to work long shifts without any breaks. Forcing businesses to follow so many laws makes it hard for businesses to survive if a business fails to make a profit through its consumers it will try and recover that money through its employees by paying them less or moving to any developing countries with less regulated or reducing the quality of the product. EU offers its members open trade and free movement but at the same time, it restricts them for trading with any of the BRICK countries. EU is often said to be Neo-Liberal in its nature with its free open market which is highly appreciated by the countries and businesses within the EU has failed the ideology. Neo-Liberalism believes giving an individual maximum freedom with minimum to no government intervention (A. Haywood,2016). EU highly believes in free markets which are the policy of unregulated market competition and completely free from government intervention. Creating the idea of Laissez-faire which means to be left alone. Therefore, economic activity should be entirely free from government intervention.

Since the rise of Neo-liberalism in 1945, it has been highly criticized by many ideologies especially the Marxist as a market that’s left to be run by itself is at a risk to be exploited by those who are in power. For example, the capitalist will try to dominate the markets they are a part of like Amazon in America. Besides the European Parliamentary that are selected to represent its countries citizens are mostly not known therefore the European Parliament is not democratic therefore there is no representation for the common men. Therefore, referring to the three main factors which were firstly manufacturer and consumer-friendly it makes sure that the businesses are protected and regulated if they are following all the ethical and legal guidelines set by the EU and consumers get a good quality product for a better price by creating more market gaps giving consumers more options to choose from. Secondly, it damages new growing business with EU constantly changing and updating its laws many new businesses find it hard to follow and implement it financially which can be easily done by large successful firms. Lastly these types of regulation work outside the EU where most of the countries are financially strong and can successfully follow the EU guidelines but fail in countries who highly depend on foreign business investment to survive.

Looking at all these factors it is clear that there are two aspects to the question. In some aspects it’s too regulatory. In other aspects its regulation protects them and nourishes.

Bibliography

  • Heywood, A.,2017. Political Ideologies: An Introduction. 6th ed.UK:Palgarve
  • MacLean, R.M & Volpi, B (2000). EU Trade Barrier Regulation: Tackling Unfair Foreign Trade Practices. (1st ed.). England: Palladian.

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