Economics · 2019 · November · Paper 2 · SL · Question paper

Economics Standard level Paper 2 9 pages Thursday 7 November 2019 (morning) 1 hour 30 minutes Instructions to candidates y Do not open this examination paper until instructed to do so. y You are not permitted access to any calculator for this paper. y Section A: answer one question. y Section B: answer one question. y Use fully labelled diagrams and references to the text/data where appropriate. y The maximum mark for this examination paper is [40 marks]. © International Baccalaureate Organization 2019 N19/3/ECONO/ SP2/ENG/TZ0/XX 8819 – 5113 Section A Answer one question from this section. 1. Study the following extract and answer the questions that follow. Japan–European Union Economic Partnership Agreement (JEEPA) In July 2017, the Japan–European Union Economic Partnership Agreement (JEEPA) was announced and it may come into force in 2019. Jointly, Japan and the European Union (EU) currently account for 28 % of global gross domestic product (GDP). The trade agreement could raise the EU’s exports to Japan by 34 % and Japan’s exports to the EU by 29 %. Economists say that this trade agreement marks a determined effort to combat rising protectionism and sends a powerful signal that cooperation, not trade protection, is the way to tackle global challenges. The largest benefit to Japan will be for Japanese car manufacturers, as Europe will gradually lower tariffs from 10 % on Japanese cars. Car tariffs are a big concern for Japanese car manufacturers, who struggle to compete with South Korean car manufacturers. South Korean cars are sold to the EU tariff-free thanks to a free trade agreement signed in 2011. Within Europe, car manufacturers are one of the largest sources of jobs. Car manufacturers in the EU are concerned that cutting tariffs on car imports from Japan may lead to a large increase of Japanese cars into the European market. The trade agreement will also resolve non-tariff barriers, such as technical requirements and regulations. More importantly, however, the EU and Japan will make their environmental and safety standards on cars the same, which will make trade easier. Japanese politicians have been defending their relatively