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a)Identify the key trends emergeing from recent domestic and international events that are likely to impact Australian exporters and importers in the forseeble future
b)Discuss the likely strategy that Australian exporters and importers may need to adopt in order to cope with the challenges and oppurtuinities resulting from the recent trends in 'a' above.
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Australia was ranked as the 19th Nation in the world,both in terms of export as well as import in 2010It has free trade agreements with a number of countries like Singapore, Chile, US, Thailand, etc. The primary exports of Australia are coal, beef, alumina, iron-ore, wool etc. It also imports crude oil, telecommunication equipment, computers, and transport equipment. There are several important trends which determine the impact on the level of import and export as listed below
The ever increasing income of the Asian economies and the expanding population are some big trends in the International economy, which would have a big impact on Australian trade. The GDP for the developing Asian region is expected to be close to 6.8% for 2014 as compared to 2.2% predicted for the advanced economies(Pash, 2014). Thus, it is important for Australia to work in close integration with the Asia-driven economy. The Australian economy is closely connected with Asia on three dimensions: trade, people and capital. It is known fact that the Australian exports to Asia have been growing very fast, largely because of the growing demand for resources in China. Incoming capital investments from Asia have also seen a huge increase of about 50% in the last ten years(Pash, 2014). At present, Australia is a net importer of capital. These increasing inflows of capital are driven by the motive to seek huge returns in a low-risk environment. This sentiment can be used to fuel the growth of the Australian economy, with particular sectors like tourism, education, real estate and financial services. This growing trend can also adversely impact the local players due to stiff competition from the Asian players who might capture a huge share in the Australian market. On the other hand, Australian exporters may find a huge gain because of the extremely large consumer base present in Asian markets.
According to a report published by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), there are lots of opportunities in terms of food exports to economies like India, China, South Korea and Japan. The report predicts that China would be resorting to more import of pig meat, poultry meat, fruits and wheat. It also predicts that the demand for the dairy products, beef and sugar in China would almost double by 2050
In the years to come ahead, the key natural resources would become scarce putting increasing demand on energy, steel, food etc., and thereby increasing pressure on prices. This price instability and increasing demand are due to worldwide population explosion with more than two billion more middle-class consumers by 2025. Australia is known to be a diversified resource exporting nation. It is a leading exporter of natural resources like iron-ore, alumina, gold, etc. For Australia, this can be a good news if the country can maintain its usual surplus of key resources.