Import Substitution and Export Promotion: The Case of Australia and the United States

1Import substitution
and Export
oriented approach
THE CASE OF AUSTRALIA AND THE UNITED STATES

2Introduction
 There are two different strategies for export industrialization
employed by different states and countries.
 Import substitution and export promotion trade strategies have
always been a controversial issue among many states through
the years.
 These battle is between two philosophical thoughts.
 Trade optimists who support outward looking development policy
and believe in free trade and free movements of goods across all
the border.

3The case of Australia
 The second school of thought believes in independent existence.
 They believe that a country and a company must write their own
destiny an purpose without necessarily depending on other
external cooperation's with other countries.
 Both of these policies have disadvantages and advantages.
 The policies are used depending on the need of the state or the
continent at that particular time.
 Australia, however, as a country employs export promotion.

4Import substitution
 Low income countries engage in industrialization in order to
develop.
 But they can’t keep competition with already industrialized
markets.
 They have to protect themselves from imports which come from
industrialized and highly productive economies and need
protection from imports from developed countries.
 For a developed country like the US, the industrial method is
employed as a way of battling competing currencies.