Free trade (1 Viewer)

[Beats]

Hey - I am shockingly uninformed about current events and was wondering whether anyone knew about what the Free trade agreement with America means - what is Australia's outlook etc
I would be a big help if anyone knew of any good sites or something like that...Thanks

 

[L1onHeart]

free trade meaning no tariff imposed on both goods from austalia or usa and i think it will make our good more competitive

 

[santaslayer]

not just tariffs......any artifical barriers imposed by governments with the intention of giving local producers an advantage over foriegn producers

 

[abdooooo!!!]

well the general idea behind free trade was first proposed by adam smith, he said that division of labor is a must to improve production/cost. the smaller the division the more efficient the production... but to keep this assembly of laborers on the job a big enough market will be needed to make enough profit to support their salary... free trade is a way of increasing the size of the market for all countries... hence allowing greater division of labor thus increasing the overall production for the world as a whole or two partner countries.

but as a leader of a country, they only get votes from the people in their own country... so to keep their job they must cater for the interest of locals... this is one of the main barriers hindering the growth of economies world wide.

didn't australia sign some sought of free trade agreement last month or something with the US? i don't follow the political developments LOL.

 

[AGB]

Originally posted by abdooooo!!!
didn't australia sign some sought of free trade agreement last month or something with the US? i don't follow the political developments LOL.

they signed it only a couple of days ago...in the last few months, we also signed one with singapore (actually it was a while ago...about 6 months)

it is important to follow these sort of things because they can be directly linked into your essays i.e. if you had a question that said 'discuss the effects of protectionist policies on the global economy' then this info would be perfect for it

 

[abdooooo!!!]

lol. essays... hate them... lucky i don't do hsc economics

 

[Beats]

Thanks a lot. What annoys me about having to know current stuff is that it changes all the time - who would have thought ?

 

[tWiStEdD]

NOTE: HSC Examiners are writing our exams over the next few months. Significant economic events will be included. This will most certainly be applicable to some of the exam.

for more information visit:
www.smh.com.au
www.dfat.gov.au

I will update this post with my own opinions/summary, or perhaps make a new thread.

 

[ameh]

the benefits of a free trade deal for australia is microscopic

 

[AGB]

Originally posted by amoz_lilo
the benefits of a free trade deal for australia is microscopic

where did u get that idea?? they are quite significant (or at least they will be in the long term)

 

[tWiStEdD]

AGB is right.

Consult any economics textbook. Do not base what you say on the media. I have noticed that the media has been highly critical of the FTA, particularly as a result of Mr Lathams poor excuses for political point scoring. I will have to vote come the next Federal election. I will most certainly vote Liberal first, and Labour in some insignificant position for this very reason.

Any party which is willing to send our economy backwards in such a manner as blocking the FTA, also threatens to put us out of work and cause our standard of living to decrease. The opportunity costs of NOT embracing free trade with the country that accounts for 33% of all economic activity are, in the long term, severe. We stand to miss out on decreasing opportunity for employment, productivity increases, economic growth and cold, hard cash.

Consider the 'Gains from Trade', which i am sure you are familar with. Also, watch out for Ross Gittin's comments on the FTA (SMH Sunday and Wednesday) that should be coming out soon, if they are not out as of yesterday.

Futhermore, you should back up such radical statements simultaneously to inflicting them upon us.

edit: Gittins seems critical, but that will have something to do with the paper he works for.

 

[m1nx]

whilst i agree with most of what twisted is saying, it is more in regards to long term, rather than short term. tariffs are being "phased out" over 18 years (which then you could also say that it is more of a "freer" trade agreement) and unemployment will increase before it decreases.

according to my eco teacher, the fta is more of a political than economic thing~ it just formally acknowledges allegance, but doesn't have as big of an impact on the economy as it has been made out to be. something like .33% of australia's GDP and .02%(!) of america's. and think about what other countries the us has fta's w/~ chile, singapore, mexico + canada (NAFTA).

 

[Turner]

Originally posted by tWiStEdD
edit: Gittins seems critical, but that will have something to do with the paper he works for.

I think that's compeltely unfair. Gittins has always maintained that he writes about the economy from an unbiased political opinion - neither right nor left.

From what I've read the FTA benefits the US more than Australia (no suprise considering they are larger and had more barganing power), but there are still many benefits for us. It's a great pity agriculture wasn't largely included, but that's a result I think of agressive rent seeking behaviour in the lead-up to an election year.

Even if it is 0.33% of GDP, that is a large figure in dollar terms, and a credable boost to economic growth. Even so I'd like to know where m1nx got that figure from.