International Trade and Logistics

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

TRADE AND LOGISTICS 2
Table of Contents
Executive Summary..........................................................................................................................i
Introduction......................................................................................................................................1
Findings...........................................................................................................................................1
Benefits and Challenges for Australia.............................................................................................2
Comparisons of Value Creation and Value Destruction in Free Trade and Anti-Trade
Environments for Australia..............................................................................................................4
Conclusion.......................................................................................................................................5
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 i
Executive Summary
International trade is important because it helps countries to exchange goods and thus be able to
meet the needs of their citizens. Since no country can possibly produce the full range of goods
that it consumes, it has to rely on other countries, near and far, to meet the deficit of goods that it
may experience. Since the world is becoming smaller and smaller due to advances in information
and media technology, nations have become more and more dependent on each other for the
buying and selling of services and goods. In the simulated exercise, I am an international trader
from the continent of Australia and dealing with the sale of aluminum, wool and coal. In the
international market, my intentions are to sell of all that I have and purchase a wide range of
commodities for sale at home. Some key findings were: when a trader puts a certain commodity
up for sale, the seller needs not have mercy to the buyers by giving them counteroffers that are
close to their initial offers; that the world economy is dynamic, changing from good to bad
condition and vice versa; free trade has many benefits as it enables the free flow of goods
everywhere; and, any international trader needs to take time to study the world market and
therefore the international trends of commodities in the market before deciding to buy or sell.
There are a number of benefits and challenges for Australia in a free trade environment and an
anti-trade environment respectively. Benefits are: more markets for Australian goods; increased
volume of goods sold; increased incomes from international trade; affordability of Australian
goods at a cheap price to other countries; increased production of goods for export by Australia
due to free external markets; and, increased spending by households in Australia due to
affordable imports. Challenges are: Fewer markets for Australian goods; fewer sources of goods
for the Australian domestic market; higher costs of goods sold to external markets from Australia
due to imposed taxes and tariffs; lower volumes of goods sold to outside markets from Australia;

TRADE AND LOGISTICS ii
higher cost of imports to Australia; and, reduced domestic spending of households in Australia
due to high costs of imports. Comparisons are also made between value creation and value
destruction in free trade and anti-trade environments for Australia. Benefits include: More
markets for Australian goods; increased volume of goods sold; increased incomes from
international trade; affordability of Australian goods at a cheap price to other countries;
increased production of goods for export by Australia due to free external markets; and,
increased spending by households in Australia due to affordable imports. Challenges are: Fewer
markets for Australian goods; fewer sources of goods for the Australian domestic market; higher
costs of goods sold to external markets from Australia due to imposed taxes and tariffs; lower
volumes of goods sold to outside markets from Australia; higher cost of imports to Australia;
and, reduced domestic spending of households in Australia due to high costs of imports. The
conclusion of this paper is that the benefits of free trade internationally far outweigh the
challenges of operating in an international environment of restricted trading. International trade
continues to be ever-changing, and these changes can and be advantageous to countries that
support free trade. Some policy recommendations for Australia include: consider creating for
itself a stronger brand which should be able to sell its goods internationally; expanding its
portfolio of exported goods to cover more goods and services; and, lowering its cost of doing
international business by removing all possible restrictions that may cause the cost of doing
business by international traders to go up.