Which of the following identifies an important reason why empirical studies find that joining the EC in 1973 may have imposed a substantial net cost on Britain?
A)Trade creation for British manufactured goods
B)Removal of trade barriers on imports from Australia and New Zealand
C)Trade diversion on agricultural products
D)Withdrawal of subsidies received by the British farmers

Question

Quizplus · Accepted Answer

Empirical studies have found that joining the EC in 1973 led to trade diversion for British agricultural products, as the country had to end its preferential trade arrangements with Commonwealth countries such as Australia and New Zealand in favor of European partners. This led to higher prices for British consumers and lower export earnings for British farmers, contributing to a net cost for the country. Trade creation for British manufactured goods may have provided some benefits, but it was not significant enough to offset the costs of trade diversion in the agricultural sector. The withdrawal of subsidies for British farmers was not an immediate consequence of joining the EC, but a longer-term effect of its agricultural policies.

Which of the Following Identifies an Important Reason Why Empirical