Disadvantages Of Trade Liberalisation

Trade liberalization is removal or reduction of restrictions or barriers on the free exchange of goods between nations. This includes the removal or reduction of both tariff (duties and surcharges) and non-tariff obstacles (like licensing rules, quotas and other requirements). The easing or eradication of these restrictions is often referred to as promoting "free trade." http://www.investopedia.com/terms/t/trade-liberalization.asp#ixzz3Zi8THzn3 Tariff is simply a tax placed on import. It is designed to increase the price of the foreign good or service so that the competing domestic good receives a price benefit. The tariff is also an important source of revenue for the government.

Subsidies are grants or payments made by the government

Besides that, Australia is low cost of production, this result the increase of national income. As the national income becomes higher, the Australia economic grow and the Australian standard of living become higher. At the same time, the Australian dollar will depreciate due to Australian posse more higher saving to import goods from oversea and invest oversea. Due to the depreciation of the Australian dollar, the exporters have more higher international competitive to other because their cost of production is low, the demand for Australia goods increase because of lower price and this will increase the supply of export goods and increase the capital inflow. Due to the depreciation of Australian dollar, the relative inflation rate will also decreases, the investor from other country will found Australia to be a relatively more attractive destination for their funds compared to other economics then the Australian dollar will appreciation. The Gross Domestic Product (GDP) is equal the consumption, investment, governments spending and net export. Due to the consumption of Australians, investment from other country investor and net export increase, GDP also increase, that means Australia economic are growing. Besides that, the employment will increase, because the export increase, the producer needed more employees in order to produce more dairy product. Trade liberalization also benefit to the consumer because due to the tariff removal, the cost of production decrease and the price of imported goods also decrease, the consumer just have to pay lesser but get more quantity of dairy