International Economics and Trade Between Australia and Japan

Running head: INTERNATIONAL ECONOMICS AND TRADE
International Economics and trade between Australia and Japan
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INTERNATIONAL ECONOMICS AND TRADE
Introduction
Australia is a highly developed market economy. In 2019, its GDP was estimated to be
AUD 1.89 trillion. Australia is the 21st largest export economy out of 119 country and also 21st
largest importer economy. The trade balance rank of Australia is 19th. In 2018, the country
exported US $252.77 billion worth of goods and services and imported US $235.51 billion worth
of products and services, with a trade balance of US $17.25 billion (Global Edge, 2020). The top
trading partners of Australia are China, Japan, USA, South Korea, Thailand, India and Hong
Kong (Oec.world, 2020). Among these trading partners, one of the major countries is Japan. In
2017, the bilateral trade value was US $71.8 billion, with Japan being the second largest export
destination of Australia. This essay will provide an overview of the terms of trade of Australia
with Japan, its impact on the trade pattern between the two countries, and on the economy of
Australia and the level of integration of Japan with Australia over the past two decades in terms
of international trade. The bilateral trade agreement between Australia and Japan will also be
discussed to understand its impact on the trade level and their economic growth.
Discussion
Japan is Australia’s second biggest export market. The value of Australia’s total export to
Japan in 2018 was US $41.35 billion, while the total import from Japan was US $17.35 billion
(GlobalEdge, 2020). Following images show the level of export and import between Australia
and Japan over two decades, that is, from 2000 to 2020.

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INTERNATIONAL ECONOMICS AND TRADE
Figure 1: Total export value: from Australia to Japan
(Source: Ceicdata.com, 2020)
Figure 2: Total import value: from Japan to Australia
(Source: Ceicdata.com, 2020)
It can be seen from the above images that the level of export from Australia to Japan has
increased significantly 2000 onwards. It showed a very sharp increase during 2008-09, reaching
an all-time high of AUD 6.059 million in 2008, and 2010 onwards, the growth in exports to

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INTERNATIONAL ECONOMICS AND TRADE
Japan has been quite stable and substantial, almost doubling from the previous decade. There
was a fall in export in 2016, which is due to the fall in the commodity prices all over the world.
However, 2017 onwards, the export volume recovered.
On the other hand, the import volume from Japan to Australia has been steady over the
two decades and it also has shown an upward rising trend 2008 onwards. The import level from
Japan showed a sharp decline in 2011 which also recovered in 2012. There have been some
fluctuations in the import trend from Japan to Australia over the two decades, and although, the
growth has been steady, the overall level of import was less than the overall level of export from
Australia to Japan (Department of Foreign Affairs and Trade, 2020).
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
0
1,00,00,000
2,00,00,000
3,00,00,000
4,00,00,000
5,00,00,000
6,00,00,000
7,00,00,000
Total Export and Import of Australia from Japan
(A$000), 2006-2019
Total Export (A$000) Total Import (A$000)
Figure 3: Comparison of total export and import value, 2000-2019
(Source: Department of Foreign Affairs and Trade, 2020)
In 2019, the total export value to Japan was US $24.4 billion, which was 9% of the total
exports of Australia (Workman, 2020). The major exports of Australia to Japan included LNG in