Australia'sstrong domestic consumption indeed improve its GDP, so Australia tends to avoiddisrupting market regulations and to reduce trade barriers for a long period oftime, with the aim of providing a relaxed market environment to improve itsdomestic business and improve the competitiveness, while nurturing the domesticmarket.
For examples, Australia signs several agreements likeChina-Australia Free Trade Agreement (ChAFTA). Andafter signing these agreement, Australia greatly reduce trade barriers of someproducts and also gets some benefits from that. I think it will have somepositive impact on economy of Australia. First, Australia's export ratewill continue to increase, and eventually reach about 95%. Due to the lowprice, Chinese customers prefer to buy goods from Australia and not in othercountries. For example, people can eat beef at a restaurant at a cheaper pricethan before. They do not have to worry about the price that they cannot afford,because in nine years, beef tariffs will be completely exempt. As a result, theAustralian farmers will have more income.
However, inrecent years, Australia has a tendency to increase trade barriers to Chinabecause government wants to protect the domestic market and avoid corporationbeing takeover. These changes are mainly because the rapid development ofChina's economy makes the Chinese enterprises have a strong competitive strength,as well as worried that China's acquisition of domestic enterprises willthreaten the economy and national security.
For examples, foreignersare required to pay more than 5% of money as taxes when investing intelecommunications and other industries in Australia, and they also need to getgovernment safety assessments and approvals, and the implementation of thispolicy has become more stringent in recent years. This is a typicalmanifestation of the growing trade barriers.
From my point ofview, the change in trade barriers for the purpose of creating a loose marketis rational. Besides, it is also justified to set up the trade barriers interms of its own economy, but this change is also because of some politicalconsiderations and the pressure of the United States.
