INTRODUCTION Globalisation is an economic integration between countries by removing or reducing trade barriers between the countries to facilitate international trade and investment. Globalisation enables improved flows of trade, investment (FDI and Portfolio investment), technology, labour and finance. Trade agreement is trade in the absence of protection by Government to domestic industry. It is a win-win proposition because free trade enables Australia to focus on the core competitive advantage thereby maximising economic output and promoting income growth for the citizens. Australian Prime Minister Tony Abbott signed The Japan-Australia Economic Partnership Agreement (JAEPA) on 15 January 2015. The Japan-Australia Economic Partnership Agreement …show more content…
The Australian Bureau of Statistics and the Department of Industry and Science reported that earnings from minerals and energy exports reached $195 billion in 2014. In 2014, Australia's major exports to Japan included LNG (estimated at approximately $14 billion), coal ($11.9 billion), iron ore ($8.4 billion), beef ($1.6 billion), and copper ores and concentrates ($1.6 billion) makes Japan as Australia’s second largest trading partner. Higher export earnings of Australia results in higher GDP (economic growth). It is estimated that for every 1% increase in ratio of trade of GDP, disposal personal income per person increases 2-3%. The increase in domestic income leads to higher standard of living in Australia. Other than GDP, reduction of tariff for imported goods from Japan is also a factor that leads to higher standard of living. The 5% reduction of tariff for Japanese goods in Australia causes the consumers to have variety of choices of goods and services with cheaper price. With the local industry competing with Japanese industries, the efficiency will increases causing production of higher quality product for the …show more content…
For example, the elimination of 5% tariff on Japanese cars over five years makes the buying a new vehicle up to $1500 cheaper. Cheaper Japanese cars coming into Australia makes the competitiveness of Japanese cars increased compared to Australian-made vehicle. The General Motors Holden intends to shut down all auto production by the end of 2017. Other than increased competition, this can be also caused by sacking of workers in automotive industry. General Motors Holden sacked 90 workers, after the firm failed to get enough profit. Currently, there are 1,260 workers left at the Elizabeth plant, compared to 5,000 workers in 2008. Daily production is being steadily scaled back where the production was as few as 240 cars are being made per day. Sales of locally produced Holden vehicles are down by 14.1 percent this year, falling to just 15,765 units to the end of