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Trade and Comparative Advantages

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Patrick chen

on 6 November 2014

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Transcript of Trade and Comparative Advantages

Trade and Comparative Advantage
Australia - Japan
Australia - Korea

Agriculture
Larger usable area
Great environment
Skill of planting and breeding
Australia comparative advantages
Japan comparative advantages
Korea comparative advantages
Japan (JAEPA)
Korea (KAFTA)
Two-way trade between Japan and Australia stood at $70.8 billion in 2013, more than 10 per cent of Australia's total trade

Trade
Au-Jp exports: $49.53b
Au-Jp Imports: $21.22b
Invest
Au in Jp: $50.23b
Jp in Au: $130.98b
Korea is Australia’s third-largest export market and fourth-largest overall trading partner, with total two-way trade exceeding $30 billion in 2012-13.

Trade
Au-SK Exports: $20.76b
Au-SK Imports: $9.67b
Invest
Au in SK: $10.39b
SK in Au: $12.03b
Background Information
Winners
Customers & Businesses
Korea-Australia Free Trade Agreement on 8 April 2014

Japan-Australia Economic Partnership Agreement on 8 July
JAEPA
Over 97% of Australia's exports to Japan will receive preferential access or enter duty-free
Australian consumers will benefit from a wider and lower priced range of goods and services including cars and electronic goods
KAFTA
99.7% of Australia’s goods exports will enter Korea duty free
Lower the cost of Korean products and inputs for Australian businesses as Australia removes tariffs on Korean goods
the main changes between Austraian and Japan
Australia:
Beef
Australian companies sale beef to Japan increasing $5.5 billion, including decreasing in the frozen beef tariff
Sugar
Japan could eliminate 21.5% per kilogram traiff on raw sugar and reduce the levy

Japan:
Education
Japanese students can study in Australia
the main changes between Ausralia and Korea
Australia:
Agriculture
Australia's agriculture exports have able to compete in Korea
Australian investors will be protected by this agreement
Education and Financial services
Opens new markets for Australian law firms, accountants and telecommunications providers
Equally Benefits?
Conclusion
Losers
Local Businesses
In Planning model
In reality
No equal benefit among countries’ trading
More benefits to Australia
90% mineral of total import from Au
Eliminates tariffs on all of Australia's minerals, energy and manufacturing exports
Au remove 5% tariffs imported Japanese cars
Eliminate 40% tariff (beef)
Eliminate tariffs on manufactures, resources and energy products within 10yrs
SK provide 95.7% duty-free on Au export within 10yrs
Thanking for Listening
Keith
MK
Patrick

Natural Resources
Coal
Iron ore
Copper ore
Education
Multicultural of study abroad
Car
Toyota
Household Appliances Industry
Sony
Panasonic
Trade of location
Manufacturing Industry
Electronics product
Samsung
Japan import more agricultural goods from Australia
Korea import more education and financial services from Australia
Australia has the comparative advantages of agricultural, natural resources and education
Japan has the comparative advantages of cars and Household Appliances Industry
Korea has the comparative advantages of manufacturing industry and trade of location
Australia is the winner in these trade agreements
The trade deals benefit of Australia, Japan and Korea are not equally
Equal benefits among Australia, Japan & Korea.

Using their own comparative advantages.

Specialization & maximum profits.
Full transcript