logo

The 13th biggest economy in the world

11 Pages2173 Words208 Views
   

Added on  2021-04-16

About This Document

The country has extremely liberal trade policies that support the prosperity of the citizens through a strong economy, boost the economic growth, and encourage domestic and foreign investment and businesses (dfat.gov.au, 2018). However, there are few areas, where the Australian government has already imposed trade barriers, such as, in the agricultural products and processed foods, manufactured goods like steel and automotive good (hktdc.com., 2017). The economic reasons are as follows: Protecting the domestic producers and industries

The 13th biggest economy in the world

   Added on 2021-04-16

ShareRelated Documents
Running head: INTERNATIONAL BUSINESSInternational BusinessName of the Student:Name of the University:Author note:
The 13th biggest economy in the world_1
1INTERNATIONAL BUSINESSTopic 3: Political Economy of International Trade Australia is one of the most developed countries of the world. The country has neverexperienced economic recession within the past 26 years, which is a record. Australia ranks 11thin the list of highest GDP per capita and it is the 13th biggest economy in the world. In 2016, theinternational trade has contributed 40% of the total GDP (). The country has extremely liberaltrade policies that support the prosperity of the citizens through a strong economy, boost theeconomic growth, and encourage domestic and foreign investment and businesses (dfat.gov.au,2018). Australia has been a part of many free and preferential trade agreements with various nations thatpromote the growth of international trade. However, there are few areas, where the Australiangovernment has already imposed trade barriers, such as, in the agricultural products andprocessed foods, manufactured goods like steel and automotive good (hktdc.com., 2017). Therecan be many economic and political reasons for employing trade barriers by the Australiangovernment.The economic reasons are as follows: Protecting the domestic producers and industries is the major economic objective of tradebarriers. When the domestic manufactures are unable to compete with the international products,the government should impose trade barriers on imports. Reduction in imports leads to rise indomestic production with improved quality and increase in employment and in GDP of thecountry (intelligenteconomist.com, 2017). Once the domestic manufacturers improve theirproduct quality, they can compete in the international market. However, this should be a shortterm strategy as in the long term, the domestic industry might lose interest of improving.
The 13th biggest economy in the world_2
2INTERNATIONAL BUSINESSSecondly, trade barriers provide revenue to the government. Tariffs can bring asubstantial amount of the foreign currency to the tariff imposing country. If Australia imposesimport tariffs, it can earn a good amount of different foreign currencies from the countriesexporting goods to Australia (Almahmoud, 2012). Thirdly, trade barriers also offer protection from dumping. In the international trade, animporter can sell its low quality products to a country at a price below its average cost ofproduction if there is no trade barrier in the importing country. This affects the local industries.Anti-dumping duties and laws help in protecting the domestic manufactures from the dumpedproducts (nordeatrade.com., 2018).The political reasons for imposing trade barriers are: According to some policy makers, maintaining the level of imports at a minimum levelguarantees political independence. When a country becomes heavily dependent on the importedproducts, it loses its economic and political independence and its growth faces hard challengesdue to poor domestic production, lower GDP and unemployment. This can lead to economicembargo, as experienced by Iraq, Iran and Syria (Treisman & Di Lieto, 2017). Trade barrierspush a country to improve its manufacturing sectors and have economic growth. A strong selfdependent economy reduces the political vulnerability of the nation. Secondly, trade barriers helpa country to protect domestic jobs from the cheap foreign labor, which helps in generatingemployment in the country and ensuring political stability (intelligenteconomist.com., 2017).
The 13th biggest economy in the world_3
3INTERNATIONAL BUSINESSTopic 4: The Foreign Exchange, the IMF & the International Economic Environment The assignment 2 focuses on the macroeconomic analysis of a country, where the chosenorganization would like to do business. For an organization, which wants to do business in aforeign country, the macro environmental analysis is very important. This analysis presents thegrowth opportunities and risk factors that can affect the business positively and negatively. Themacro environmental analysis are performed on the factors that can affect the businessexternally, hence, economic, political, cultural, legal and ethical environmental analysis areperformed to evaluate the business opportunities in that chosen country (Barkauskas,Barkauskienė & Jasinskas, 2015).International Monetary Fund (IMF) is an international economic and financialorganization. It was established in 1945 with the objective of ensuring global financialcooperation and security across 189 countries, facilitating international trade, promoting higheremployment rate and sustainable growth and reducing poverty across the world (img.org, 2018).Thus, the IMF website is expected to contain economic and financial information regardingevery country that would help in performing the economic analysis of the chosen country. Economical factor analysis consists of the analysis of the economic factors, which havesignificant impact on the business scenario of a nation. GDP, inflation are two major economicfactors, along with financial position, FDI position, SDR capacity, debt relation, balance ofpayments, trade agreements, interest rate, exchange rates are some other important economicfactors that influence the economic condition and business opportunity in a country (Dunning,2014). In the website of IMF, there is summarized information about the chosen country’sfinancial and population status, along with projected real GDP, projected consumer prices, date
The 13th biggest economy in the world_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Trade Barriers: Effects on Growth and Development of Countries
|6
|1397
|323

The anti-immigration policy adopted by the USA government
|6
|1083
|9

Tariffs and Import Duties- Effects on Industries and Other Economies, Costs and Benefits of a Tariff
|13
|3673
|475

Importance of Protectionism in Domestic Market
|7
|1654
|384

Technical Barriers to International Trade and Their Impacts
|13
|3318
|303

Economics and International Trade: Free Trade, Tariffs, Absolute and Comparative Advantage, Indifference Curve
|7
|1395
|63