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Australian Foreign Policy and Trade
• Economics has traditionally been linked to
  Foreign Policy.
• DFAT is an example of this. (Department of
  Foreign Affairs and Trade)
• Economic matters were given the same
  importance as foreign affairs.
             The Australian Economy
• Australian GDP in the mid 1990s was less than
  5% of America’s.
• Now:

                        Australia        US
GDP (2009)              $858.8 billion   $14.26 trillion
GDP per capita (2009)   $40,400          $46,400
GDP (2010)              $882.4 billion   $14.66 trillion
GDP per capita (2010)   $41,000          $47,200
                  The Brits
• Phase 1 – British are most important trading
• “Men, Money and Markets”
                   Phase 2
• After WWII trade increased with nations
  outside the British Empire at a great rate.
• The US, NZ, newly independent Asian states
  (Indonesia, Singapore, Malaya).
• “Japanese Economic Miracle”: occupied by
  the US after WWII, Japan introduced reforms
  to their economy to bring it in line with the
  west, capitalist economies.
                  Phase 3
• Trade with major Asian powers (Japan, China,
  Korea, etc) becomes a much larger slice of
  Australian Economic Activity.
• Deregulation of the Australian Economy
  (lowering tariffs).
• Floating the Australian Dollar.
      FTAs and Internationalism
• FTAs introduced with the US, others currently
  being negotiated with Japan, China, etc.
• Aus also takes a very prominent role in
  International Trade organisations
  – WTO
  – G20
• GFC – Aus emerges with one of the strongest
  western economies. This is due to what?
• (Article from The Drum)
• Australia has moved towards multilateralism
  with more involvement in APEC and similar
• It was thought that Australia had to pursue
  their national interests through regional and
  multilateral channels when Britain was moving
  away from unilateral trade.
• Australia decided to reduce tariffs on goods
  into Australia by 25% in 1973.
• This had a mixed reaction.
• Some blamed the recession that followed
  Whitlam’s government on this decision.
• Fraser, however, continued with market
  liberalisation, and became a spokesman for
  freer global trade.
• Hawke and Keating governments also sought
  to prioritise economic objectives.
• Floating of the Australian dollar in 1983.
• Australia committed itself to multilateralism,
  but barriers to free trade were still around.
• Aus protected it’s own manufacturing
• USA and EU unwilling to reduce protection in
  their agriculture sectors.
• “Cairns group of agricultural exporters”
  founded by Hawke.
1. Define ‘protectionist’ and give some
   examples of protectionist policies.
2. Why do some governments employ
   protectionist policies?
3. What are the benefits and drawbacks of such
   a policy?
• “Liberal Rule” DVD

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