Determinants of companies’ external competitiveness at the agricultural markets of EU
Journal Title: Економіка. Фінанси. Право - Year 2018, Vol 10, Issue
Abstract
Introduction. The EU agrarian markets are very attractive for international companies, resulting in the dynamism of competition. On the other hand, the EU is characterized by extremely restrictive trade and agricultural policies. It magnifies the need to study the impact of the environment on the companies’ competitiveness. Purpose. The purpose of the paper is to assess the impact of the CAP and EU trade policy on the external competitiveness of international agribusiness enterprises. Results. The key aspects of competitiveness are the price and quality of products, which are influenced by the common agricultural and trade policies. Thus, the EU trade policy, which is used to restrict access to the market, includes measures protecting the national agrisectors of the EU, limiting foreign imports. It usually involves high import tariffs or quotas that limit the amount of imports for a particular product from a given country and allow domestic producers with high production costs to compete. Further, internal support includes support for prices and direct subsidies paid by government to farmers. Payments that are most distorting trade are those related to levels of production (so-called related direct payments), which contributes to overproduction and lower world prices. In our opinion, direct payments, within the financial instruments, do influence the level of competition in the markets of agricultural products of the EU and, respectively, on the competitiveness of companies both from the EU and from the third countries. We believe that payments from EU funds within the framework of the CAP, firstly, increased productivity, improved the structure of the markets and made them more competitive; and, secondly, improved trade balance of agrarian products of the EU countries. Conclusion. The CAP and EU trade policy are key determinants of the external competitiveness of companies.
Authors and Affiliations
Daniil Oleksandrovych Vitko
Keywords
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