On July 8th, 2014 Japanese arrived in Australia after 12 years to sign a free trade agreement. A free trade agreement is said to take place between countries, such as Australia and Japan based on the article, when there are no barriers to trade put in by the respected governments or international organizations. Goods and services are allowed to move freely between countries. Furthermore, FTA’s is a type of trade bloc that could have the potential to eliminate protectionism type barriers, for example tariff’s. A tariff is a tax that is charged on imported goods.
Based on the article, this free trade agreement will bring 39 billion dollars worth of GDP to Australia and 27 billion dollars to Japans economy. Also, the free trade agreement will eliminate any tariff on dairy products such as tomatoes or peaches bringing in 372 million dollars and in the beef industry, fresh beef exporters will have tariffs cut to 23.5 per cent from 38.5 per …show more content…
Japan and Australia won’t heavily be harmed or affected by the free trade agreement in each domestic market. With Japans financial, legal, and telecommunication businesses they will not lose any type of market shares from the Australian industry because of their high efficiency. Although, In figure 2, the Australian industries within these sectors of Japan cannot take away their (Japan) markets because as they are compared there is not competitiveness in this foreign market due to Australia’s high price at s(world) vs. Japan at (Pe). Thus, the supply curve on the figure is above equilibrium making Australia’s products for this sector in Japan when the free trade agreement is enacted not worthy. However, Australia with its dairy and beef products will not lose its shares to Japan after the free trade agreement because these markets are highly competitive once tariff are
Based on the article, this free trade agreement will bring 39 billion dollars worth of GDP to Australia and 27 billion dollars to Japans economy. Also, the free trade agreement will eliminate any tariff on dairy products such as tomatoes or peaches bringing in 372 million dollars and in the beef industry, fresh beef exporters will have tariffs cut to 23.5 per cent from 38.5 per …show more content…
Japan and Australia won’t heavily be harmed or affected by the free trade agreement in each domestic market. With Japans financial, legal, and telecommunication businesses they will not lose any type of market shares from the Australian industry because of their high efficiency. Although, In figure 2, the Australian industries within these sectors of Japan cannot take away their (Japan) markets because as they are compared there is not competitiveness in this foreign market due to Australia’s high price at s(world) vs. Japan at (Pe). Thus, the supply curve on the figure is above equilibrium making Australia’s products for this sector in Japan when the free trade agreement is enacted not worthy. However, Australia with its dairy and beef products will not lose its shares to Japan after the free trade agreement because these markets are highly competitive once tariff are