Policy Response to the Pandemic and Its Challenges: A Comparative Analysis of Australia and USA

POLICY RESPONSE TO THE
PANDEMIC AND ITS
CHALLENGES A
COMPARATIVE ANALYSIS
OF AUSTRALIA AND USA

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of impact of COVID-19 on the trade relationship Australia and USA:......................3
Study effectiveness of Covid policies on Macro-economy.........................................................5
Determine macro-economic interdependencies among Australia and USA................................6
Role of trade and capital flow in Australia and USA..................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
The COVID-19 is one of the most powerful virus in human history, this pandemic
impacted almost every economy of the world. It has far-reaching spread of consequence of
health as well as on the economy, most of the country are now facing the recession period
(Gautam and Hens, 2020). It can be look at gross domestic product of global economy almost
shrunk by 4.4% in the year 2020. The intail stage of this pandemic impact the economy badly
because of lock down that effected the service sector of both the countries, in this report we will
understand the impact of COVID-19 on the economy of Australia and USA and examine the
effect on trade and capital flow. Later we will evaluate the effectiveness of certain COVID-19
policies on the macroeconomic of both the countries. At last, we will find out can cryptocurrency
help countries to recover the economy.
MAIN BODY
Overview of impact of COVID-19 on the trade relationship Australia and USA:
Australia is one of the liberal economy, they been admiring Westminster government
form. It is the one of the most successful country in the world (Hiscox, 2020). They are now
controlling the spread of COVID-19 with the help of stable political system, well-designed
national health system, geographic isolation and national wealth system of the country
contributed equally. However, the USA, did not take any early precaution as Australia did, hence
they face the most difficult time.
Free Trade Agreement link between Australia and USA:
The United States and Australia have very healthy and cooperative trade relationships, they
various done billions of dollars of trade with each other without any conflict (Jackson, 2016).
The both of the countries are under US-Australia Free Trade Agreement, commonly called
(FTA). The joint committee of both the country supervise and undertake certain action to
maintain good trade policies. Before the arrival of COVID-19, they both are having perfect
relationships but when the COVID-19 impacted the economy of both countries, the Trade
Agreement also got effected. This impact bring down all the previously donned trade agreement
such as import and export of agriculture goods, sanitary and phytosanitary trade matters, labour
and financial service,
Capital flow and trade statistics: Australia GDP was 1.3 trillion dollars in 2020. After the
impact of the pandemic the GDP come down by 4.2% and unbalanced the capital flow of the

country. US goods and service is 50 billion dollar alone with Australia in 2020. the export
relationships of the both the country is around 38.5 billion dollar and import relationships is
estimated to be 20.2 billion dollars alone in the year 2020.
Trade statistics: Australia is on the 21 rank with the largest trade partners of The USA,
according to the commerce department of The USA (Trade relationship, 2021). The impact of
COVID-19 bring down the growth of trade relationships between these two most stable
countries. The US foreign direct investment with Australia meant to be effected in past two
years. The USA and invested more than 98 billion dollars in stock of Australia, the report of
Australia foreign direct investment show that after the stability of economy The US tend to
decrease the investment on manufacturing units, technological service and finance service of the
Australia.
Sales of service: The USA tend to increase the sales of service majority with Australian
affiliated firms, on the other hand Australia tend to decrease the sales of service with The USA's
affiliated firms after the impact of COVID-19 (Çelik, 2021). The service sector of both countries
heavily impacted because of the lock down, service sector equally contribute to the development
of the country.
US-AUSTRALIA shared values: Australia is partner and very good friend of The USA, they
both have shared value, cultural value and common interest. Both of them tend to have stable
economy and vibrant academic relationships (Kelton, 2016). USA been operating its firm in
Australian market and tend to earn huge profit even after the impact of the COVID-19 pandemic.
The capital flow of the country tend to increase because of the interference of the USA in
Australian market. They both know the value of maintaining good relationships. The
International Monetary Fund (IMF) and World Trade Organization together take actively
participant in the development of both the economy of the country. Things are changed after the
impact of the pandemic, at the initial stages of the Lock down, both the countries tend to slow
down the process of import and export. The lock down effected almost very things between these
two country.
Future of Free Trade Agreement: after the impact of COVID-19 pandemic, both The USA and
Australia are now planning to rebuild the trade link that has been broken by the pandemic. They
both agree to undertake all the trade related criteria which include the fiscal policies,
manufacturing of goods and services, foreign direct investment and other important trade related