Protection Policies

• Common Agricultural Policy (CAP)

  Agricultural policy of the European Union that provides high subsidies to farmers, affecting global market access for efficient exporters like Australia
• Trade partners

  India, ASEAN, China, UK, and Japan play significant roles in Australia's trade
• China's trade importance

  China became Australia's largest trading partner since 2007, with a share of exports more than twice as large as Japan
• Composition of trade

  Australia focuses on primary industries, with agricultural and mineral exports accounting for over two-thirds of its export earnings
• Barriers to trade

  Factors that hinder the free flow of goods and services between countries, such as tariffs, quotas, and regulations
• Protectionist sentiments

  Beliefs or policies advocating the protection of domestic industries through measures such as tariffs, import quotas, and subsidies
• Protectionism

  Economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations
• Trade liberalization


  The removal or reduction of restrictions or barriers on the free exchange of goods between nations
• Protectionist trade barriers

  Policies and measures designed to protect domestic industries from foreign competition, such as tariffs, import quotas, and subsidies
• Tariffs


  Taxes or duties imposed on imported or exported goods, often used as a protectionist measure to make imported goods more expensive
• Protectionist tariffs

  Tariffs imposed on imported goods to protect domestic industries from foreign competition
• Average tariff level

  The mean percentage of a country's tariff rates on imported goods
• Protectionist policies

  Government actions and regulations aimed at shielding domestic industries from foreign competition
• Protectionist measures

  Policies and actions implemented by a government to protect domestic industries from foreign competition, such as tariffs, quotas, and subsidies
• Trade agreements

  Bilateral or multilateral agreements between countries that regulate and promote trade between them
• Bilateral trade agreements


  Agreements between two nations that regulate and promote trade between them
• Multilateral trade agreements


  Agreements between multiple nations that regulate and promote trade between them
• Free trade agreement (FTA)

  An agreement between two or more countries to facilitate trade by reducing or eliminating tariffs, import quotas, and other trade barriers
• Bilateral free trade agreement

  An FTA between two countries aimed at reducing or eliminating trade barriers to promote economic integration
• Multilateral free trade agreement

  An FTA between multiple countries aimed at reducing or eliminating trade barriers to promote economic integration
• Trade liberalization initiatives

  Policies and actions aimed at reducing or removing barriers to trade, such as tariffs, quotas, and regulations
• Export assistance programs

  Government initiatives and support to help domestic businesses export their products and services to international markets
• Export Market Development Grants (EMDG) scheme

  A program administered by Austrade to provide financial assistance and marketing advice to small-medium sized exporters
• Anti-dumping measures

  Tariffs or duties imposed on imports that are priced below fair market value, aimed at protecting domestic producers from unfair competition
• Austrade

  The Australian Trade and Investment Commission, which provides assistance for exporters including financial aid and market information
• Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA)

  A comprehensive bilateral agreement between Australia and New Zealand aimed at promoting free trade and standardization of laws and business practices
• Regional Comprehensive Economic Partnership (RCEP)


  A China-led multilateral trade agreement covering around 30% of global GDP and population, aimed at providing preferential trade treatments among member countries
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)


  A multilateral agreement aimed at increasing market access across borders, reducing tariff barriers, and imposing rules around the conduct of state-owned enterprises
• Australia-United States Free Trade Agreement (AUSFTA)

  A bilateral agreement between Australia and the United States aimed at reducing tariffs and promoting trade in various goods and services
• Korea-Australia Free Trade Agreement (KAFTA)

  A bilateral agreement between Australia and South Korea aimed at improving access for Australian exporters to the South Korean economy and facilitating more services trade
• Australia-United Kingdom Free Trade Agreement (A-UKFTA)

  A bilateral agreement between Australia and the United Kingdom aimed at eliminating tariffs on a wide range of Australian exports and supporting working holidays for Australians in the UK
• Protection


  Any type of government action that has the effect of giving domestic producers an artificial advantage over foreign competitors
• Over the past 30 years, the Australian Government has removed many protective barriers on various Australian industries ie manufacturing
• The Governments main aim in reducing protection:

  • Make domestic industries more internationally competitive by exposing them to competition from imported goods
  • Concentrate the economy on areas where Australia has a comparative advantage
  • Allow Australia to benefit from greater integration with the global economy by giving consumers and businesses access to goods and services available on the global markets at the lowest possible prices
  • Promote structural change in the economy with the long-term aim of encouraging efficient firms to produce what the global economy demands
• Australian Government subsidies farmers to increase international competitiveness as good prices can be volatile especially after a natural disaster
• Australia's average tariff level has declined since the last 1960s
• Short-term implications of Australia's policies for individuals

  • Increase in structural and regional unemployment in import-competing industries
  • Cheaper imports may increase the standard of living
• Long-term implications of Australia's policies for individuals

  • Some individuals may need to go back into job training sacrificing potential income
  • Job opportunity increases in more efficient exporting industries
  • Increased purchasing power and an increase in the standard of living
• Short-term implications of policies for domestic firms

  • Firms are forced to innovate, invest, and increase competitiveness
  • Inefficient import competing industries may close
  • Smaller percentage of market share
  • Loss of profits while the restructuring process is necessary
• Long-term implications of policies on domestic firms

  • Efficient firms innovate and become internationally competitive
  • Intermediate goods are cheaper and hence lower production costs for domestic firms