International Trade and Logistics

Running head: INTERNATIONAL TRADE AND LOGISTICS
1
International Trade and Logistics
Name:
Institution:

Running head: INTERNATIONAL TRADE AND LOGISTICS
i
Executive Summary
The prosperity of countries is hinged on international trade. Countries need to export
higher value and import lower value in order to maintain a balanced trade portfolio. A positive
value of international trade shows that the country’s economy is strong, while a negative value
shows that it is weak. In this paper, several lessons are drawn on international trading, including
the traders who benefit (buyers and sellers) when the economy is good or bad, the volatility of
the world economy, the need to have knowledge of trade restrictions, and the need to employ
with when trading i.e. bargaining. There are benefits for Australia trading in a free market and
these include having more and varied markets for Australian goods, having an increased volume
of goods to trade and unlimited imports. In a situation of challenges, the overseas markets for the
country would be low, sales volumes would be low due to quota restrictions, and goods imported
by the country would be expensive. The study also has a table showing a comparison of value
creation in free trade environments and value destruction in anti-free trade environments. The
study concludes with the need to promote free international trade, and makes policy
recommendations for Australia such as the country continuing to press for free trade all over the
world so that it can have a wider market for its goods sold and a wider source for the goods to
import; giving its traders as much assistance and incentives as possible to participate in
international trade, and considering exporting services overseas and this will add income to the
country.

INTERNATIONAL TRADE AND LOGISTICS ii
Table of Contents
Executive Summary..................................................................................................... i
Introduction................................................................................................................ 1
Findings...................................................................................................................... 1
Benefits and Challenges for Australia.........................................................................2
Comparisons of Creation of Value and Destruction of Value in Free Trade and Anti-
Trade Environments................................................................................................... 4
Conclusion.................................................................................................................. 4
Policy Recommendations for Australia.......................................................................5
Appendices................................................................................................................. 8
Appendix 1: Gantt Chart for Sales..............................................................................8
Appendix 2: Gantt Chart for Purchases......................................................................9

Running head: INTERNATIONAL TRADE AND LOGISTICS
1
Introduction
The prosperity of countries is hinged on international trade. Countries need to export
higher value and import lower value in order to maintain a balanced trade portfolio. A positive
value of international trade shows that the country’s economy is strong, while a negative value
shows that it is weak.
I am an international trader from the continent of Australia. Australia deals with capital
intensive goods. In this simulated case, the items of trade are aluminum, wool and coal, two of
which are industrial products while one is an agricultural product but produced under non-labor-
intensive conditions. My intentions in the market are to sell of all that I have and purchase a wide
range of commodities for resale to customers back at home. I commence trading with 5 and 100
metric tons of aluminum and coal respectively, and 800kg of wool. The amount of money at my
disposal is $ 8,000. I manage to raise my account to $34000 by selling all the items I have to
various traders by accepting their bids. Then I manage to purchase goods from all the other
continents except cotton in Africa where I am restricted by being informed that there are trade
restrictions between our countries. After buying a considerable amount of goods, I am able to
remain with $25,000.
Findings
The following findings were made as I traded:
One main finding of this study was that when the world economy is good, from the
aspect of traders, sellers are able to sell their commodities at a higher price while buyers are able
to buy them at a higher price. Therefore, a good economy is positive for sellers and negative for
buyers (Shepherd & Hamanaka, 2015). The reverse is also true: when the economy is bad, it