Economics_Essay

1) With greater internationalism of the Australian economy, exports and imports of goods as a percentage of GDP rose from around 12% in the mid-1980s to 23% of GDP by the 2000s. o Australia recorded surplus in the goods and services balance of $58,805m in 2008/09 as the value of goods and services exports exceeded the value of imports. o 2) The major change in Australia’s trade relations over the last five decades was the shift away from British and European markets to Japan, China and Asian markets. o Japan is Australia’s chief export market with 19.3% of total exports in 2007/08, but China is now Australia’s second most important export market, escalating from 4.5% in 1996/97 to 14.9% in 2007/08. o The ASEAN countries are an important Australian export market due to their high growth, geographic proximity and resource network. o The growth in Australia’s export and import merchandise trade over time has been due to: Trade liberalisation within the Asia Pacific region under WTO and APEC initiatives. Bilateral free trade agreements between Australia and some of its major trading partners such as the USA. o 3) Australia imports consumption, capital and intermediate goods Consumption goods – food, beverages, clothing and cars. Capital goods – machinery, computers and industrial or transport equipment. Intermediate goods – fuels, chemicals, textiles and plastics. 4) In 2008/09, 21.9% of total imported goods and services were consumption goods, 39.5% were intermediate goods, 18.5% were capital goods and 20.15 were services. 5) The floating of the Australian dollar and the removal of foreign exchange controls in 1983 led to a more flexible regime for Australian companies to engage in international trade and investment.