The Government Role in Australian Economic Activity and Main Aims of the WTO's Doha Round - Case Study Example

World Economy Name Institution World Economy Topic A The role government in Australian economic activity and examples of important economic institutions created by government in Australia Today, the Australian economy is rated one of the largest globally with a Gross Domestic Product of US$1.526 trillion based on research conducted in 2014 (Credit Suisse Research Institute, 2013). In fact Australia is ranked as the 12th leading economy in the world based on its nominal GDP. Australia’s GDP is higher compared to that of Germany, France and the UK. Creighton (2012) stated that the country has increased its trade and is now ranked as the 19th leading exporter and 19th leading importer in the world. In the process, the Australia has accumulated wealth worth 6.4 trillion dollars (Junankar, 2013). The economy of this country is majorly dominated by service sector which contributes 68 percent of the GDP, while mining sector contributes 7 percent and agricultural sector contributes 12 percent. Janda (2012) claimed that the growth of the economy has led to increase in employment which now stands at 11,637,800 while unemployment has reduced significantly over the years. In 2012, Australian Bureau of Statistics claimed that the rate of unemployment rate stands at 5.8% (Janda, 2012). From the analysis, it is clear that economy of Australia has faced as several rapid changes in post World War II period leading high economic development. While some people think that economic development have just come out of blues, the truth is the government has played a big part in such changes. In fact government holds various roles in influencing the economy of a country. In Australia, the government holds three key roles in economic activity such as management of the economy, the distribution of wealth and allocation of resources (Janda, 2012). A study has established that in normally cases, there exist two fundamental economic concerns which the government normally endeavors to resolve when managing its economy. In most cases the government of Australia manages unemployment and inflation, which directly affect the economy. The government Australia also plays part in economic activity by distributing wealth. Adelman (1999) argued that in a market which has a structure of capitalist like Australia, government must always strive to ensure that income and wealth is fairly distributed among the societal members and they are capable of earning some income. Another role of the Australia in economic activity is the resource allocation. Normally, resources are scarce and the government must ensure that they are fairly and efficiently allocated as much as possible (Janda, 2012). In so doing, the Australian government is ensuring that all people have access to the standard of living and people can access education, healthcare services and transport among others. In the process, the government of Australia has created important economic institutions to help in the influencing of economic activities. Reserve Bank of Australia (2015) contended that some of the economic institutions created by the government include banking and non banking institutions such as commercial banks, Credit Unions, stock markets, department of finance, and Building societies, Financial Reporting Council, Reserve Bank of Australia, Australian Taxation Office and Australian Securities Exchange among others. Topic B Why WTO was formed and what preceded it. WTO a short form of World Trade Organization is defined as an organization between intergovernmental that regulates and controls the international trade (Bryan, 2009, p.25). The World Trade Organization officially signed and adopted on 15th of April 1995 by 123 nations to replace General Agreement on Tariffs and Trade (GATT) which had been in operation since 1948 (Heaka, 2015). The number of members has since grown and the organization today has 161 member states. The organization has its headquarters in Geneva, Switzerland and headed by director-general. As stated earlier, Davis (2012, p. 47) argued that the body was also formed to regulate trade between member countries by offering a platform for settling trade agreements and disputes within the WTO clauses. Heaka (2015) posited that the organization creates the legal rules for international trade for which member can conduct businesses. In the process it aims at building economic peace and the stability in world markets. Davis (2012) stated that Ii implies that the rules ratified by individual members have been adopted by local legal systems. Such rules therefore, apply the decisions of local companies when conducting business in the global platform. For instance, when a company has decided to set up an outlet in another nation, then the WTO rules will be used to govern the excise and operations. Technical, domestic laws of a member country cannot challenge the WTO regulations and rules. The agreement was made on the belief the WTO are implemented as required, member countries are able to negotiate trade terms and solve disputes, then WTO will be able to help raise standards of living, increase employments, grow demands and real incomes, and increase production of goods (Fergusson, 2008). The main aims of the WTO's Doha Round and its results so far Normally, the WTO has what is called ministerial conference which member country meet at a agree country to negotiate and agree of various resolutions. Fourth ministerial conference is of such meeting which took place in Doha Qatar in 2001 and created the Doha Development Round (Fergusson, 2008). Kym (2006) claimed that the development round passed two forms of declarations which involved agricultural development and industrial tariffs in developing countries and trade related intellectual property rights particularly in pharmaceutical products. Agricultural development negotiation entailed issues like reducing export subsidies, market access and domestic support. Intellectual property rights aimed at supporting and promoting public health and equal access to the medicine. According to Fergusson (2008), the results of Doha Development Round have never been achieved since the negotiations stalled and 2005 deadline not met. A study into the Doha Development Round revealed that its future was uncertain as the conflict between member countries was still looming. The major differences have emerged among developed nations particularly European Union, Japan and the US against developing nations such as India, China, South Africa and China over trade remedies, agriculture, non-tariff barriers, industrial tariffs and services (Chen-Kuo, 2011, p.15). Attempts to review the negotiations have not been successful. References Adelman, I. (1999). The role of government in economic development. Working Paper No. 890, California Agricultural Experiment Station Giannini Foundation of Agricultural Economics. Bryan, M. (2009). Reflections on the World Trade Organization and the Prospects for Its Future. Melbourne Journal of International Law 10(1), 23-43. Creighton, A. (2012). Reserve Bank governor says Australia has long had a two-speed economy. The Australian. Credit Suisse Research Institute (2013). Global Wealth Reaches New All-Time High. The Financialist. Chen-Kuo, L. (2011). World Trade Organization (WTO) Negotiations between Developing and Developed Countries: An Evolutionary Game Theory Approach. International Journal of Management, 28(3), 11-27. Davis, C.L. (2012). Why Adjudicate? Enforcing Trade Rules in the WTO. Princeton University Press. Fergusson, I.F. (2008). World Trade Organization Negotiations: The Doha Development Agenda. Congressional Research Service. Heaka, R. (2015). What Is The World Trade Organization? Investopedia. Retrieved 13th November 2015 http://www.investopedia.com/articles/03/040203.asp Junankar, P. (2013). Australia: The Miracle Economy. IZA Discussion Papers 7505, Institute for the Study of Labor (IZA). Janda, M. (2012). Doing a job on the employment figures. ABC News – The Drum. Kym, A. (2006). Agricultural Trade Reform and the DOHA Development Agenda. World Bank. Mrrouse. (2015). The Australian Economy: role of government. Retrieved 13th November 2015 http://mrrouse.com/2011/05/23/role-of-government/ Reserve Bank of Australia. (2015). Main Types of Financial Institutions. Retrieved 13th November 2015 http://www.rba.gov.au/fin-stability/fin-inst/ Read More