Trade Policy Formulation - Australia - Coursework Example

TRADE POLICY FORMULATION by Student’s name Code+ course name Professor’s name University name City, State Date Trade policy formulation Introduction Each and every business requires policies to regulate, and award mandate to the transacting parties. In Australia, the government has the authority to formulate defined measures that will govern how transacting parties undertake their responsibilities in business. Currently, there are various trade policies being enacted by the Australian government seeking to reinforce trade and foster admirable business relations. The current trend depicts that each and every nation is eyeing on implementing the globalization status which entails opening up domestic traders to the international scene (Winham 2004). The Australian government is among the forerunners in the quest for globalization and hence has formulated an array of policies that are to be enacted in the foreseeable future. The main intent of the trade policy is to open up the Australian economy. In addition, trade policies protect the local industries from unfair international competition. In a general perspective, the Australian government is extremely cautioned on conferring international companies greater legal right that the domestic companies. In addition, the law enacted should be such that, it avails clear cut measures negating any form of discrimination that would arise in the course of international business (Donn 2003). Since time immemorial, the Australian government has inculcated clear cut policies that would assist investor dispute resolution in the instance of an unexpected eventuality. It is expected that this policy will be implemented in the forthcoming trade regulations to foster trade agreements between Australia and its international trading partners. This is because; the trade agreement has to address the risks prevalent in the business fraternity. They include; sovereignty risk, credit risk, default risk and currency risk. It is the mandate of the government to safeguard the interests of its business fraternity (Engaging Asia getting it right for Australian business 2011). The intention of this discussion is to delineate how international trade as a policy issue affects the business operations in Australia. In addition, the paper seeks to discuss how the United States of America tackles the same international trade issue and how it affects the business operations (Inquiry into Australia's trade and investment relations with Asia, the Pacific and Latin America 2011). It is vital to note that Australia has signed over 20 bilateral investment agreements or treaties most of them being with developing states. The international trade agreements seek to ensure that the foreign investments will be accorded substantive protection by the host country. In addition, the treaties emphasize that the international investors will be accorded fair competition and free from any discriminatory tendencies. On a highly procedural level, the international trade agreements seek to harness the advantages emanating from transacting with other nations on arms length. This implies that transactions are undertaken on a level of cohesion and agreement where each party garners an array of advantages. For instance, the double taxation treaty that has been signed by countries all over the world between their trading partners endeavors to negate double tax. This measure in itself encourages business practitioners between the transacting countries to engage in massive enterprises than before (Australian business law services: a report 2002). There are exceedingly many advantages that emanate from lucrative trade policies among countries. This is because; there is no single self fulfilling nation that does not require product or services from another foreign nation. In light of these sentiments, Australia is well aware of these facts and has sought to implement measure that will facilitate lucrative relations with like minded nations. However, it is noteworthy that Australia has more prominent relations with the developing nations while many consider Australia in its capacity a developed nation (Sheil 2002). The twist is that, close ties with the developing world will ensure that the developed state exploits extemporary rewards. In essence, the developing nations sell their products lowly priced as they lack resources or expertise to produce high quality products. In addition, such states lacks know how to endow their human capital with desirable techniques. This implies that their human resource is weak hence bargains for low payment. The sole intent why Australia and other developed nations desire to interact with the developing nations is because; the developing nations have poor bargaining power compared to their developed counterparts. The main desire of the developing nation is to fund the stalled projects as well as provide basic commodities to the citizens. This implies that Australia benefits immensely from cheap labor, as well as semi produced goods. Once the goods are produced through technical machinery that warrants high quality, the output is sold to other nations reaping immense profits to Australia. Many analysts have over the years criticized this practice stating that this is mere exploitation. It is worth noting that the developing nations are in dire need of funds and the only thing that the developed nations do is to assist the undeveloped world. Amidst this controversy, Australia has signed over 20 treaties with nations more likely grappling and seeking economic survival. However, Australia has signed elaborative trade pacts with well established economies for instance China. This is because; Australia does not want to stagnate in its height of development (Engaging China: the realities for Australian business 2009). The economic ties with China and America ensure that Australia will keep afloat with the current developments going around the world. This is beneficial as it ensure that the country will gradually thrive improving overall measures and moving towards globalization. Trade pacts in a general view resonate to various advantages being attained by both countries in relation. It is notable that both countries are involved in entrenching trade relations to maximize the advantageous position. For instance, Australia has since time immemorial implemented a futuristic trade policy that would ensure a multi lateral position is achieved. Australia is quite skeptical in future dealings with other economies. This is in regard to the international trade liberalization policy that has resonated to ugly scenes in the past. However, there is a remarkable resemblance between how the Australian government undertakes the trade policy issue compared to America (Fynmore 2003). The United States of America is not a super power but is home to tremendously prominent business moguls who thrive eminently in the global market. This is because; the country has not only formulated appropriate trade policies but has also enacted them. The policies seek to defend the position of the United States, as well as their investors in any financial transaction deal negating any form of loss emanating from a diversifiable risk. This implies that the country has put in place exceedingly stringent policies with regard to international trade to mitigate loss or downfall of the local industries. There is a staunch similarity between America and Australia in their way of formulating international trade policies (The future of Australia's trade & investment relations with South America 2007). First, America has signed the most trade agreements than any other nation in the world. The greatest percentage of these signatories revolve around nations bearing the ‘developing county’s’ status. This implies that America interacts with developing nations to engage in business transactions. This is because; America being a super power intends to retain that status in the foreseeable future. The only way that is possible is by ensuring that it amasses control of most essential resources bequeathed by nature to the developing countries (Blanpain, Bromwich, Rymkevich, Spattini & Valdez 2009). In a twist of events, the United States is in relation with competing economies to ensure that it is abreast with all new information. Information is a hugely powerful resource, and the American government well aware of this fact seeks to ensure that no single country will surpass its business acumen. For instance, America owes large amounts of money to China that has been dominating in matters revolving around currency liquidity (Holland 2002). America and Australia have similar ways of undertaking their business also considering that they are both members of the World Trade Organization. This is an organization that seeks to empower economies all around the World by reinforcing the existing bonds between these nations (Gunstone 2007). It is notable that, through the implementation of the trade policies, Australia is an exceptionally outstanding economy thriving beyond darned anciently established economies. This implies that the trade policies play a significant role in fostering success of an economy. Other developing nations around the world have sought to ensure that business predominance is attained by tightening the ties with allies all over the business spectrum. The only caution lies on the fact that, as lucrative as this endeavor might seem it is fundamental that the countries signing the pact be hugely sober not to expose their local industries or investors at a risk (Cushing 2003). The trade policies are designed by professionals then inculcated by the government machinery. However, the government should have a keen interest of its citizens when formulating the policies. Australia has over the year’s garnered immense growth attributable to appropriate international trade policies. This is among the many factors that have sustained the United States of America as a super power to date. It is essential to note that trade policies propagate a country’s performance as well as indicate economic progress. Australia depicts the role played by trade policies in shaping up a country’s economy (European Australian Business, 2000). Reference list Australian business law services: a report, 2002, Canberra: Australian Coalition of Service Industries :. Blanpain, R, Bromwich, W, Rymkevich, O, Spattini, S, & Valdez, 2009, The modernization of labour law and industrial relations in a comparative perspective. Austin: Wolters Kluwer Law & Business ; . Cushing, R, 2003, The Challenge of NAFTA: North America, Australia, New Zealand, and the world trade regime. Austin, Tex.: Lyndon B. Johnson School of Public Affairs :. Donn, C, 2003, The Australian Council of Trade Unions: history and economic policy. Lanham, [MD: University Press of America. Engaging Asia getting it right for Australian business, 2011, North Sydney: Australian Industry Group. Engaging China: the realities for Australian business, 2009, North Sydney, N.S.W.: Australian Business Foundation. European Australian Business, 2000, Sydney: The Council. Fynmore, R, 2003, Australian business & diplomacy in the Asia-Pacific region: past, present & future. Sydney: Research Institute for Asia and the Pacific, University of Sydney. Gunstone, A, 2007, Unfinished business: the Australian formal reconciliation process. North Melbourne, Vic.: Australian Scholarly Publishing. Holland, K, 2002, The impact of the North America Free Trade Agreement on federal relations in Canada, the United States and Mexico. Adelaide, S.A., Australia: Centre for International Economic Studies, University of Adelaide. Inquiry into Australia's trade and investment relations with Asia, the Pacific and Latin America, 2011, Canberra: Joint Standing Committee on Foreign Affairs, Defence and Trade. Kerr, W. A., & Gaisford, J. D. (2007). Handbook on international trade policy. Cheltenham, UK: Edward Elgar. Sheil, C, 2002, Globalisation Australian impacts. Sydney: UNSW Press. The future of Australia's trade & investment relations with South America, 2007, Canberra, A.C.T.: Department of Foreign Affairs and Trade-AUSTRADE. Winham, G, 2004, The evolution of international trade agreements. Toronto: University of Toronto Press. Read More