Nature Of Trade : Australia Essay
Trade is ‘the action of buying and selling goods and service’ (Oxford Dictionary).
Trade is important as it allows country’s to obtain goods and services that they would not be able to acquire otherwise. Trading is significant to Australia as it contributes to the economy. The Australian two-way trade service is worth approximately $670 billion, 2013-2014 (Department of Foreign Trade, 2014). Trade is significant as it can recede poverty rates, establish jobs and develop the economy.
Australia’s primary commodity exports are coal, iron ore, gold, meat, wool, alumina, machinery and transport equipment and wheat. Australia’s primary commodity imports are machinery and transport equipment, computers and office machines, telecommunication equipment and parts, crude oil and petroleum products.
Trade made up a total of 42% of the GDP in 2013. According to (Australian Trade Commission, June 2014) Australia’s exports in 2013 were valued at $319 billion, making up 21% of the GDP. Australia’s imports also made up 21% of the GDP, valued at $329 billion. The graph below shows Australia’s top 12 trade partners. As shown in the graph Australia’s imports and exports with China were valued at 150.9 billion (2012-13).
Factors Impacting Trade
There are a number of factors that impact trade. Two factors that particularly effect trade in Australia are tariffs and exchange rates.
According to Investopedia a tariff ‘is a tax that add to the cost of imported goods’. Tariffs…