Trade Policy of Australia-Free-Samples for Students-Myassignment

Question: Discuss about the Trade policy-comment on Australia's trade policy. Answer: Trade policies consist of rules that are derived for exchange of goods at the global market. These rules will consist of tariffs, import regulations, export regulations and quotas and are developed so that foreign exchange of goods can occur smoothly without any hindrance. The trade policies are set in such a way that it will have a positive impact on economy, employment and the various industries. The countries having restrictive trade policies have less growth in their economy than that following trade openness. As stated by Salvatore (2014), the majority of the nations are focusing on reducing their trade barriers and free trade agreements have become popular in all the continents, which started a new era of globalization. As stated by Taylor and Taylor (2017), Australia has strong trade relationship with various countries due to it location and they have developed several policies in the past decade that will facilitate their international trade. Australia has established six free trade agreements, which have enabled them to improve their economic growth. The Australian economy has grown significantly in the past decade and this is possible due to the foreign policies they have developed. Australia is one of the largest exporters of agricultural products and livestock so developing effective trade policies will enable them to boost their economy. There has been significant growth in Australian due to the increase in their export volumes. This has been possible because of the free trade policies that the government has developed. As opined by Handley (2014), the key to understanding the effectiveness of trade policies is development. Development will consist of commensurate growth in production, employment opportunities and investment and population growth. There has been significant growth in the economy of the country as Australia is a heavy exporter of goods and the author is of the same opinion that to maintain heavy inflow of capital, high level of earnings form exports is required. It is impossible for Australia to be self-sufficient when resources are concerned. Therefore, the cost of imports can only be controlled by increasing the export earnings. The growth in exports in the past decade has increased the employment opportunities in the entire sector. The economy of Australia grew by 1.1 percent in the last quarter in the year of 2016, which shows that there has been uninterrupted growth in the past two decade (Kenyon and van der Eng 2017). The country has experienced hindrance free growth only due t o the abundance of resources within the country. Australia has never encountered consecutive negative dip in their economic growth, which shows that they have never faced recession. The average growth of the organization has been 3.2 in the past decade and the trade policies in Australia have been instrumental in driving that growth (Tang 2017). Exports have made a strong performance in the past decade and in the last fiscal year, it has been seen that after decrement in value of goods exports in the past two years there has been steady increase in the exports. Exports contribute to 19% of the GDP of the country which means that considerable amount of economic growth is dependent on this trade policies. According to Matsushita et al. (2015), factor endowment has been crucial in influencing the trade pattern in the Australian economy. The free trade policies have attracted large number of foreign investors, which has led to the development of the industrial sector. Initially the largest trade of Australia was United States and Britain but in the past decade, the country has moved towards Asia. China, South Korea and Japan have become trading partners of Australia, which has been possible due to the open market they have developed with minimal restriction of import. The economy of Australia has become dynamic and flexible due to its free trade policy. The trade policies have stimulated productivity and growth on a continuous basis. Trade liberalization is the policy applied by the foreign government. They had implemented unilaterally, multilaterally, and bilaterally trade liberalization for strengthening the economic growth. Moreover, it will reduce the risk faced by the country while trading the global market and accelerate growth. As stated by Qi and Zhang (2018), the geographical location of the country will have an impact on trade relations. Trade openness can be used by the country depends on the location and facilitates in bilateral trade. Bilateral trade can be defined as the volume of trade between two economies and the geographical distance between them will be inversely proportional to the trade volumes. This is main reason that Australia has been formed free trade agreements in the Asian countries, which contributes to the development of the countrys industrial structure and economy. Even though then trade openness ration of the country has been low in the past decades, Australia has been able to make progress due to their trade regulations The disposable income of the general population is high which shows that there has steady availability of employment opportunities (Dogan, Seker and Bulbul 2017). The industrial growth in the past decade is high which can explained as the minerals and mining are on e of the leading export commodities in the country and has provided major trade opportunities. Factor endowment consists of the abundant resources in a country and Australia has been blessed with natural resources. The availability of natural resources and effective trade policies has been the major strategy for maintaining steady economic growth for a country like Australia. Thus, it can be deduced that trade policies and geographic location are important factors in developing a countrys openness. Australia has made use of their location and trade policies to create an open market, which has facilitated their foreign trade. Australia has effectively made use of their available resources by developing trade policies that will provide the country with comparative advantage in the global context. Therefore, it can be concluded from the critical analysis that trade policies are been instrumental in solidifying the economy, employment and industrial growth in Australia. The country has maintained stability in their economic in the past two decade and it has been possible only due to their trade policies. References Dogan, E., Seker, F. and Bulbul, S., 2017. Investigating the impacts of energy consumption, real GDP, tourism and trade on CO2 emissions by accounting for cross-sectional dependence: A panel study of OECD countries.Current Issues in Tourism,20(16), pp.1701-1719. Handley, K., 2014. Exporting under trade policy uncertainty: Theory and evidence.Journal of International Economics,94(1), pp.50-66. Kenyon, D. and van der Eng, P., 2017. Australia and the EU: Partners in the New Trade Agenda.Australia, the European Union and the New Trade Agenda, p.257. Matsushita, M., Schoenbaum, T.J., Mavroidis, P.C. and Hahn, M., 2015.The World Trade Organization: law, practice, and policy. Oxford University Press. Qi, C. and Zhang, J.X., 2018. The economic impacts of the China-Australia Free Trade Agreement-A general equilibrium analysis.China Economic Review,47, pp.1-11. Salvatore, D. ed., 2014.National Trade Policies. Elsevier. Tang, E. 2017.Australia has experienced the longest period of economic growth in the developed world - Austrade. [online] Austrade.gov.au. Available at: https://www.austrade.gov.au/news/economic-analysis/australia-has-experienced-the-longest-economic-growth-among-major-developed-world [Accessed 2 Feb. 2018]. Taylor, S. and Taylor, M., 2017. The Aroma of Opportunity: The Potential of Wine Geographical Indications in the Australia-India Comprehensive Economic Cooperation Agreement. InThe Importance of Place: Geographical Indications as a Tool for Local and Regional Development(pp. 81-107). Springer, Cham.