.jpg)
Syllabus Topic
HSC Topic Two - Australia's Place in the Global Economy
Free trade and protection
implications for Australia of protectionist policies of other countries and trading blocs.
Australia, nestled in the Asia-Pacific region, has emerged as a formidable player in the global economy. As an open-market economy, it thrives on international trade, making it imperative to understand the implications of protectionist policies employed by other nations and trading blocs.
Australia's Dependence on Global Trade
Globally protectionist policies are on the rise, these policies can disrupt international trade patterns resulting in direct impact for Australia’s economic interests. The economic engine of Australia heavily relies on international trade, contributing significantly to its prosperity. China, Australia's largest trading partner, exemplifies the nation's dependence on global trade. Chinese protectionist measures, such as tariffs introduced in 2020 but subsequently repealed on Australian barley saw nearly $1 billion disappear from the market, underscoring the vulnerability of industries and economies relying on exports.
Additionally, protectionist policies can impact economies not targeted by the restrictive measure, as markets search for cheaper imports. This occurred during the US-Chinese Trade War, where the decoupling of trade between the nations presented opportunities for other countries.
Australia maintains an open economy, with Australian exports representing over 20% of gross domestic product, which means our economy is more vulnerable to fluctuations in global trading patterns that are the result of protectionist policies.
Australian Trade and Investment Commission
Strategies to Mitigate the Impact
As protectionist measures rise globally, the diversification of export markets and the negotiating of trade agreements becomes crucial. Australia's efforts to strengthen ties with Southeast Asian nations, such as signing the Regional Comprehensive Economic Partnership (RCEP), showcase the nation's commitment to reducing dependence on specific international markets. Strengthening domestic industries through investments in innovation and technology can enhance the competitiveness of Australia’s exports, making Australian businesses resilient to external shocks.
Additionally, diplomatic efforts become paramount in resolving trade disputes. The importance of diplomacy during trade tensions is exemplified by the ongoing negotiations to resolve disputes with China. With both countries bringing complaints to the World Trade Organisation regarding anti-dumping and countervailing measures, highlight the importance of collaboration and open dialogue in easing tensions and promoting Australia’s economic interests.
In conclusion, Australia's position in the global economy is directly influenced by the protectionist policies of other nations. Real examples illustrate the challenges faced by Australian industries, necessitating strategic planning, innovation, and diplomatic engagement to safeguard economic interests and sustain growth in an ever-evolving international landscape.
Sources
Australian Broadcast Service: Chinese protectionist measures
Centre for Economic Policy Research: opportunities for other countries
Parliament of Australia: Australian exports representing over 20% of gross domestic product
Department of Foreign Affairs and Trade: ongoing negotiations to resolve disputes with China
.jpg)
.jpg)
