Relationship Between Australia And The Global Economy

Running Head: AUSTRALIA AND GLOBAL ECONOMY
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Relationship Between Australia And The Global Economy
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AUSTRALIA AND GLOBAL ECONOMY
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Introduction
Australia is a country consisting of a mainland continent and several islands. By total
area, Australia is the 6th largest country in the world. Australia has a population of more than 25
million people, many of which live in the urban areas of Australia. Australia borders Indonesia,
New Zealand, Papua Guinea, East Timor, Vanuatu and Solomon Islands and it is surrounded by
Atlantic and Indian Ocean. (lark, Hooper, & Ferrier,1962).Its capital city is Canberra. On
leadership, Australia is ruled by Queen Elizabeth II who is represented by The Governor General
since the queen resides in England. Its government is divided into the Legislature, the Executive
and the Judiciary. Australia is a country which has close economic relationships with other
countries around the Globe. Specifically, it has been closely associated with the United States
bound together by the 1959 security treaty. It also has a desire to develop good relationships with
Asia. Economically, Australia is a wealth country with a lot of potential and economic ties across
the globe. This essay seeks to analyze the relationship between Australia and the Global
Economy.
Analysis
Australia is a developed and a wealthy country. Its economy is largely a free market
economy in which investment, production and distribution largely depend on the forces of
demand and supply. Australian dollar is the country’s currency and it has been ranked 14th
largest economy in the world. This position shows that Australia is a very large economy which
can have substantial impact on the global economy. Apart from it being ranked 14th globally,
Australia has the lowest poverty levels and the highest average wealth worldwide (Kenen, 2011).
Australia has had emphasis on exports more than manufacturing goods and this has increased its

AUSTRALIA AND GLOBAL ECONOMY
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terms of trade. The country also has signed several trade agreements that has enabled it steer
forward its economy and strengthen their international relationships. Australia is a member of
Commonwealth and also the world trade organization. Its bilateral trade agreements include
Australia-United states free trade agreements, Australia-China free trade agreements, Closer
economic relations with New Zealand and Australia-Chile free trade agreement. Through these
agreements, Australia has been able to grow economically by having good relationships with
other nation. During the 2008-2009, Australia was the only developed country who was never hit
by the global recession which saw economies of other countries deteriorating by a great margin.
Even though Australia was not directly hit by this recession, its economy was affected in the
subsequent years because six of its major trading partners experienced recession and directly
affected Australia. (Ball, 2014).
Through its relationships with other countries, Australia has been able to export and
import goods and services successfully gradually building its economy. This relationship is
relatively good and continues to create a strong bond. In Australia, free trade is a widely
discussed topic and its leaders are always ready to sign free trade deals. Trade liberalization and
economic reforms always take center stage in policy formulation in the country (Bhagwati,
2008). Just recently, the government of Australia signed a special deal with the US on tariffs on
aluminum and steel. This will help the country’s mineral exporters a lot even though experts
warn that it will be unfavorable for the economy In the long run.
In the past, Australia had trade ties with just Britain and United states. However, with
time, the country has shifted its interest to Asia where its major trading partners are. These are
China, Japan and Korea. Australia has contributed immensely to the global economy by creating
an environment favorable for both citizens and non-citizens to invest and grow in various