Essay on Impacts of Australian Trade Policies

Added on - 28 May 2020

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Running head: AUSTRALIAN TRADE POLICY AND ITS IMPACTAustralian Trade Policy and its impactName of the Student:Name of the University:Author note:
1AUSTRALIAN TRADE POLICY AND ITS IMPACTIntroductionAustralia is one of the leading trading organisations in the international market. Theeconomy of the country is affected on every level by import and export policies of the country.Some of the empirical study has concluded that there is direct positive correlation between theeconomic growth and openness to international trade. The trade policy and growth affects thecompetitiveness of the country. Liberalisations of the market and policies of the countries. Themain idea that will be analysed in the text is to check the impact of trade policy of Australia andits effect on the economy. This essay will mainly deal with the impacts that the Australian tradepolicies have on the trade and commerce of Australia. It will mainly be aimed at seeing thedifferent factors like the population, age, consumption patterns, exports, imports and severalother such factors that influences the formulation of the trade policies.DiscussionFrom the theoretical point of view, the impact of policies has affected in the long terms.The theoretical concepts are based on time factors. The trade and growth theories arecomplement to each other. The traditional trade theory does not support the liberalisationconcept. Therefore, it does not support the import policies and it might restrict trade in certaintrade favourable country. It promotes the internal consumption of the indigenous products.Dynamic trade theory considers the neo classical theories. It draws more attention to indirectgains of the country in the medium as well as in the long term. The new trade theory takes intoconsideration of the position of imperfect conditions and economies of scales as an advantage(Vernimmen et al. 2018). It also argues that the externalities restrictions to trade might be in theadvantage of the domestic companies in Australia. In the international arena, it can be used to
2AUSTRALIAN TRADE POLICY AND ITS IMPACTincrease market power. It also considers the accumulation of human capital and improvement ofskills, enhancements in the knowledge and production. Though innovators in the economy haveless impact in the prices, they have spill overs in the economy as well as positive externalities.The impact of trade policy according to growth theories, which is related to neoclassicaltheory, is actually based on closed economy. The upgrade version of this theory is based appliedin open economies. It considers that the growth approach by increase in saving after tradeliberalisations translates to growth in investments (Iamsiraroj and Ulubaşoğlu, 2015). Because ofcapital market imperfections and expropriation, it becomes bias of the home country. Theendogenous growth theory considers the liberalisation in the country and of the trade policies. Itconsiders that liberalisation policies have more impact on the technical progress and fuels to thetransfer of foreign direct investments. Trade liberalisation positively influences savings andexternalities in the closed economies and help strengthen in becoming the closed economies.Trade happens to affect the per capita income and affects the long run growth in the economy aswell as the underlying parameters (Vernimmen et al. 2018). The actual underlying factors of thetransition state in the company is mostly boosts the endogenous growth. According to the cross-country studies of trade policies World Bank refers to the social indicators of the country. Theindicators for openness measures the shares based on trade shares and price based administrativemeasures. The determinants and savings, capital accumulation, TFP growth are factorsinfluenced by trade liberalisation (Helpman et al. 2017).Australian colonies joined in a political federations and taxes and duties in the trade hadbeen abolished since 1901. The economic history of Australian trade policy changes was animportant role. The custom unions have been very important part of the trade. The reduction intariff and its affects in the welfare of the trade between the countries have major effects in the
3AUSTRALIAN TRADE POLICY AND ITS IMPACTeconomic welfare. Changes in the “border effect” period in Australia as well as the internationaland intra-national effects continued to contribute to the country’s welfare before, the federation(Helpman et al. 2017). The country’s internal and external trade flows changed in the politicaland economic union.The first period in the evolution in the Australian country was when the customs unionwas formed by Australian Colonies Government act by British Parliament. The tariffs were setby the Australian themselves but the British influenced the non-discriminatory and uniformityamong the all trading collaborates of the colonies. As a result of this conflicts arose between theintra-Australian trade. The conflicts between the New South Wales and Victoria over customduties became a problem for the inter country free flow of trade. This also became the foundationof move towards federation in 1890s and formation of commonwealth was the country’sparticipation towards commonwealth. New Zealand became a separate country and six states ofAustralia were united under the federal constitution in 1901 (Sena 2016). The six different stateslost control over the tariff autonomy. The free flow of trade and duties were integrated and flowcapital, labour, language and services became essential for the economy. New South Walesmaintained its free trade policy. This state imposed no tariffs on imported manufactured goodsand average tariff on dutiable goods and the revenue of the country grew as they imposedspecific duties in intoxicants and narcotics, ale and beer, tobacco, opium, spirits and wine. Theseproducts also had domestic taxes. Victoria and Tasmania let enter very few goods out of tariff,whereas Western Australia had tariff rates somewhere between New South Wales and Victoria.Australia’s imports were mostly on textiles from overseas, manufactured goods from Englandand interstate trade consisted of metals, foods, drinks as well as the agricultural products.
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