Organizational Review of European Union

Organizational Review of European Union (eu): Regional Organization Critical Analysis

Item Page Number

Organization Impact on Business and Trade

Recommendations for Organization's Future

ORGANIZATIONAL REVIEW of EUROPEAN UNION (EU): REGIONAL ORGANIZATION CRITICAL ANALYSIS

The objective of this work is to analyze the European Union in terms of its role as a regional or world organization and its impact on business. This work will conduct a critical analysis and will reflect in-depth reflection of the writer.

The European Union is stated to be the "...most highly evolved international organization...the product of more than 40 years of effort to integrate the countries of Europe economically and politically." (International Institute for Sustainable Development, 2000) the core of the EU is a "...customs union - and now a single market - with a common external tariff." (International Institute for Sustainable Development, 2000) the EU is a "supranational organization, widely interpreted as providing for the share exercise of its member states' sovereignty." (International Institute for Sustainable Development, 2000)

I. ORGANIZATION IMPACT on Business and TRADE

There are two primary legislative instruments of the EU, which are, the: (1) Regulation; and the (2) Directive. (International Institute for Sustainable Development, 2000) Regulations are stated to be "directly applicable" and regulations are "used for technical aspects of issues where the EU has exclusive competence..." (International Institute for Sustainable Development, 2000) This includes areas of trade and price adjustment. Directives are stated to be the chosen instrument relating to issues of the environment "since they determine the objectives to be achieved" however member states are free in their choice of implementation methods. It is related that in areas where "upward harmonization" is desired that directives "can be technically quite detailed..." (International Institute for Sustainable Development, 2000)

While individual members stated of the EU are stated to have roles that are limited in relation to the World Trade Organization (WTO) "...the EU as a whole is one of the most important actors in the organizations" in that decisions cannot be made without the EU as a whole. Extensive environmental legislation has been developed by the EU in response to market changes, essential market disciplines, including environmental requirements" which must be amended in order to provide a reflection of the EU markets integrated structure.

Directives are stated to "...cover emission standards and quality objectives for water; managing hazardous and domestic waste; packaging; atmospheric emissions from plants and vehicles; air quality standards and the stratospheric ozone layer; all aspects of toxic substances control; nature protection, migratory birds, endangered species; wildlife; noise; and climate change. " (International Institute for Sustainable Development, 2000) Individual member states and the EU share the responsibility of environmental management however, the EU exclusively manages trade issues. This results in difficulty in achieving a balancing of environmental and trade interests "since the functions of key actors are different in the two areas of policy." (International Institute for Sustainable Development, 2000)

According to a September 2007 Policy Brief entitled: "Economic Survey of the European Union, 2007" the economy of the EU faces challenges "from technological change, globalization and population aging." (OECD, 2007) the Organization for Economic Cooperation and Development additionally states: "Globalization brings opportunities for adaptable economies but punishes rigid ones, while ageing populations will put welfare systems under pressure." (2007)

The work of Cini (2001) relates that the enlargement of "any organization will inevitably have an impact upon both the joining party and the organization itself. The level of the impact will depend upon the scale of the event." (Cini, 2001) Key points expressed in Cini's work are those as follows: (1) EU membership is "much more diverse as a result of enlargement"; (2) Enlargement has had a significant impact on the running of the EU; and (3) the new member economies did well in the period leading up to the 2004 enlargement. (Cini, 2001)

II. RECOMMENDATIONS for ORGANIZATION'S FUTURE

The OECD states specific ways the EU can enable these challenges to be met including the following:

1) Pushing ahead with the internal market;

2) Opening up network industries to competition;

3) Removing barriers to labor mobility;

4) Making regional cohesion policy more effective;

5) the global role of Europe should reflect lowered trade barriers on manufactured goods as well as internal market liberalization in services toward the end of new opportunity provision for service providers that are outside the EU.

A reduction in farm subsidies is stated to be necessary in order to improve access to market along with Common Agricultural Policy reforms, which should be "de-linked from production." Finally, stated as a requirement is that of a commitment for a 20% reduction in greenhouse gas emissions, which may be achieved "through market mechanisms..." (OECD, 2007) the OECD additionally states that structural reforms are required in addressing the challenges that the EU faces and while there is an improvement in terms of the economic prospects of the EU, "there is no room for complacency." (OECD, 2007) the OECD survey relates that the EU has the potential to play a critical role in the provision of solid conditional framework and the ongoing enhancement of the internal market in the EU.

The provision of the single market includes the wider range of goods access for consumers as well as a wider range of services. Moreover, the business sector of the EU has increased its competitiveness, which has resulted in the lowering of prices and has served to drive "innovation, entrepreneurship and growth." (OECD, 2007) Needed at this time according to the OECD is "a fresh impetus." (OECD, 2007) the energy markets require a tighter linking as well as opening up to competition, which would serve to lower prices and secure energy supplies.

The OECD relates that the adoption f the electricity direction in 2003 provided for customers to have choice in who supplies their energy. There has been identified in the energy markets what are termed to be "serious malfunctions" with "vertically integrated energy giants" having the capacity to "treat competitors unfairly and shut out potential entrants." (OECD, 2007) Additionally, market concentration in the energy markets is high and prices are able to fall under the control of "dominant firms." (OECD, 2007)