Prior to the early 1980 's, strong barriers to trade limited Australia 's exporting capacity to mainly the UK and Europe regions. Being a member of the Commonwealth provided Australia with a strong foundational connection to the UK, enabling trade predominantly of agricultural products and commodities. Additionally, Australian industries were protected from foreign imports for several economic reasons. However a movement towards free trade facilitated by Australia 's participation in a number of multilateral and bilateral trade agreements meant that while domestic industries were no longer protected, long term benefits of free trade could be achieved. Despite common economic view propounding the effectiveness of free trade, there are several
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Free trade enables countries to obtain goods and services they can 't produce themselves, this is particularly relevant in a country such as Australia that has a significant competitive advantage in agricultural and mineral sector however has never specialised in manufacturing or technology industries. Free trade also allows Australia to specialise in production of products in which we are most efficient, compelling the efficient allocation of resources. This means that industries unable to compete and without a competitive advantage will be removed from the market but in the long term this will have a positive effect on the economy by not dragging it back with outliers. A greater tendency for specialisation leads to economies of scale, enabling Australia to bulk buy products that are mass produced in foreign markets for the advantage of our own specialised industries. International competitiveness will improve as domestic business, furthering the impact of strategic allocation of resources. In the long term, free trade will lead to higher living standard and economic development as a result of greater service and product choice as well as higher rates of economic growth and increased real incomes in the long …show more content…
While these are termed free trade agreements a more apt description would be preferential trade agreements due to the fact that participation within such trade blocks provide favourable access to goods and services but exclude non-member countries. As such this leads to regionalisation not globalisation. In the early 1990 's Australia became a member of the APEC forum that involved 21 member economies and 41 per cent of the world 's population. In 1994 APEC agreed to the Boga Declaration aiming to dismantle trade barriers by 2010 for developed nations and newly industrialised economies by 2015. While the APEC forum has encouraged greater cooperation between nations, it has not succeeded but rather failed in its original ambition to create a regional area of free trade. However it must be acknowledged, since the declaration average tariff levels in the region have fallen from 17 to 6 percent reflecting some progress in trade
Free trade enables countries to obtain goods and services they can 't produce themselves, this is particularly relevant in a country such as Australia that has a significant competitive advantage in agricultural and mineral sector however has never specialised in manufacturing or technology industries. Free trade also allows Australia to specialise in production of products in which we are most efficient, compelling the efficient allocation of resources. This means that industries unable to compete and without a competitive advantage will be removed from the market but in the long term this will have a positive effect on the economy by not dragging it back with outliers. A greater tendency for specialisation leads to economies of scale, enabling Australia to bulk buy products that are mass produced in foreign markets for the advantage of our own specialised industries. International competitiveness will improve as domestic business, furthering the impact of strategic allocation of resources. In the long term, free trade will lead to higher living standard and economic development as a result of greater service and product choice as well as higher rates of economic growth and increased real incomes in the long …show more content…
While these are termed free trade agreements a more apt description would be preferential trade agreements due to the fact that participation within such trade blocks provide favourable access to goods and services but exclude non-member countries. As such this leads to regionalisation not globalisation. In the early 1990 's Australia became a member of the APEC forum that involved 21 member economies and 41 per cent of the world 's population. In 1994 APEC agreed to the Boga Declaration aiming to dismantle trade barriers by 2010 for developed nations and newly industrialised economies by 2015. While the APEC forum has encouraged greater cooperation between nations, it has not succeeded but rather failed in its original ambition to create a regional area of free trade. However it must be acknowledged, since the declaration average tariff levels in the region have fallen from 17 to 6 percent reflecting some progress in trade