In December 2013 the WTO reached agreement with member countries in relation to reducing barriers to free trade - Leaving Cert Economics - Question 7 - 2014

1. Tariffs: A tariff is a tax imposed on imported goods. This tax increases the cost of foreign products, making them less attractive to consumers compared to domestic products.

2. Quotas: A quota is a limit set by a government on the quantity of a specific good that may be imported. This regulation restricts supply and helps protect local industries from foreign competition.

1. Protect Domestic Industries: Countries may impose barriers to free trade to protect their domestic industries from foreign competition. This is particularly important for new or struggling industries that may not be able to compete against established foreign companies.

2. National Security: Some governments restrict trade to safeguard national security. For instance, a nation may limit imports of certain goods that are vital for defense, reducing reliance on foreign suppliers.

Ireland is considered an open economy because it engages in extensive trade with other countries, allowing for the free exchange of goods and services. This openness facilitates competition, provides consumers with a variety of products, and helps to integrate the Irish economy with global markets.

1. Employment Creation: Increased exports lead to higher demand for goods produced in Ireland, which often results in job creation. This helps reduce unemployment and boosts the overall economy.

2. Increased GNP / Economic Growth: When Irish goods are sold abroad, the country earns foreign currency. This can enhance the national income (GNP) and contribute to economic growth, as it provides more resources for investment and state revenue.

1. Value of the Euro vs. Other Currencies: If the euro weakens against other currencies, Irish products become cheaper for foreign buyers. This can boost competitiveness as foreign markets find Irish goods more affordable.

2. Costs of Production: Keeping production costs low is crucial for competitiveness. If Ireland can produce goods efficiently without high labor costs or expensive materials, it can offer its products at lower prices compared to other nations, making them more attractive to consumers.

The initials EU stand for European Union. The EU is a political and economic union of member countries in Europe that have chosen to work together closely.

1. Larger Market / Expansion of Trade: With more member countries in the EU, Irish firms gain access to a larger market, enhancing trade opportunities and allowing greater sales volumes.

2. Lower Costs of Production: Firms in new member states may experience lower production costs due to fewer regulations. This could challenge Irish firms to innovate or lower costs to stay competitive.

3. Profitable Investment Opportunities: Irish companies may find new investment opportunities in member states, enabling growth and expansion, which can enhance profits and positively impact the domestic economy.