ECONS- 1. International trade

1. List linkages between econs and descrbe each

1. Tourism- large exports of service

2. FI- relied upon to supplement domestic savings

3. Immigration- multicural immigration= increased jobs, GDP and growth from skilled labour

2. Why is aus a medium open economy

• aus= medium as pop increased to 26 million and gdp is 2.5 trillion

• open means that we are able to move g and s without restrictions of protection policies

3. why is trade important?

• expands consumption posibilities.

• acts as engine of growth from specialisation, productivity and real income

• Imports= access to foreign g and s

• Exports= increased production

4. a countries exports is determined by

1. size and structure

2. relative competitiveness

3. location

5. trad intensity formula

(imports - exports)/ GDP x 100

6. What is the composition of australias trade

• rural/mining dominates exports, manufactured gs dominated imports

• ‘king of exports’ is mining goods such as iron ore, coals and natural gases.

• we ride on back of iron ore truck

7. What does aus comp of trade reflect about aus?

• relative advantage in resourcs of rural/mining

• cost advantage of production of primary commodities

• we are efficient and internationally competitve with our exports of rural, while our manufacturing is less efficient

• what did it used to be

• what is it now

• why?

before- agricultural goods of wool and meet

now- mining boomed and increased to 60%, rural exports decreased

• caused by CHINA- rapi growth in china as it is worlds biggest factory and needed iron ore etc to fuel= increased D from aus

• becames Aus biggest buyer

8. Why is aus direction of trade

• countries we trade with

• used to be big with europe, now china and asia pacific

8. why did aus direction of trade switch?

• GEOGRAPHICS!!

• aus was tied with UK from had to establish new markets when UK joined europian union

• Asia pacific had increasing population and decreased transport costs for aus compared to eu.

• Also had low raw materials relative to population- so they bought from aus as they require long term + cheap energy

9. WTO

   • define

   • its aim/ activities

• international trade organisation

• to decrease trade and investment to promote longt erm growth and properity by negotiating the reduction of barriers and agreeing on rules regarding trade.

9. list the principles of WTO

1. non discrimination

2. open trade

3. fair competition

4. protection of environment

10. define free trade agreement and the 2 types

• agreement to increase trade between WTO countries by lowering or removing trade

• 1. bilateral or regional

10. How do FDAS act as a trade block

make it harder to trade with members outside of group= decreased opening of markets and growth prospects

10. Difference between trade creation and trade diversion

• Trade creation= removing trade barriers to increase trade between members

• Trade diversion= when trade is diverted from low cost producer outside agreement, to high cost producer within the agreement

  

10. What is most recent fta for aus

• regional comprehensive econ corp 2022 and worlds largest trade block with over 30% of world pop

• countries include, china, japan, korea

• Aus and Uk joined 2023= eliminating all tarrifs on 99% of exports to UK.