Trade Between Australia And JapanEssay Preview: Trade Between Australia And JapanReport this essayTRADE BETWEEN AUSTRALIA AND THE NATION OF JAPAN – REPORTEXECUTIVE SUMMARYThis document aims to shed light on the issue of trade between Australia and Japan. In this comprehensive, yet brief report, areas covered include:•Development of trade•Prospects for trade•Challenges for tradeThese three areas are important in finding out how trade with Japan affects Australia.INTRODUCTIONAn active APEC (Asia Pacific Economic Corporation) member, Japan is the second most dominant world economic power. Being a world power endows it to having an influential role in not only in regional affairs but also global.
À In 2001, we estimated that trade between Australia and the world’s second biggest economy, Japan, would drive the nation’s GDP upwards by one billion dollars in 2004, thereby increasing the nation’s influence in regional affairs. With this report, Japan can put its economic interests first, make a difference to how global institutions, nations and economies operate, and make an impact on national security as well as broader issues for prosperity.Trade between Japan and its partner nation The U.S. and Europe are not the only nations that, with trade links, influence the global order. We suggest that trade between Australia and the United Kingdom will be of particular interest to United States policymakers. The U.K., for example, is a key partner in a global policy that includes access to economic support that supports both countries’ development goals. The United States, on the other hand, also has strong ties with China. We therefore ask: If Australia and the U.K. are to be a main partner in any trade-off between Australia and the U.K., what is their potential for trade?We address the importance of a trade-off between trade with Australia and Japan that can be developed and tested without taking into account the other key factors:•Japan’s own economic position and Chinaís own power-sharing arrangements•Trade between Australia and the United Kingdom will only make sense if trade with Australia and the United States occurs on separate, sustainable terms (i.e., to avoid disruption in regional politics for China or the West, as discussed in this paper). While Japan enjoys good trade relations with China, its trade gap has worsened since the financial crisis. Both the U.S. and Australia can work together to increase the size of Japan’s trade to both countries. By investing in trade with Australia, Japan is providing a means to improve its competitiveness. For example, by investing more in global health and education, Japan may help improve the health of its nationals in Latin America and the Caribbean. This would allow it to compete in global markets.But more importantly, because of its strong ties to China and its large trade partners and to its growing demand for advanced technology, Japan can have access to higher-quality goods from the United States and Europe, but be more open to bilateral trade. We propose that the U.K.’s trade policy should embrace the trade-off principle that Japan is an important player in world affairs and is a key player in improving global trade.To achieve this, we propose that the U.K. introduce a series of trading covenants that will enhance competitiveness and promote economic cooperation. Trade between the United States and the United Kingdom will be of particular concern. Both countries are
Japan is a large supporter and participant in humanitarian programs as well as providing ODA (Overseas Developmental Assistance) to many third world and developing nations. It is the world’s largest creditor country.
Japan is generally and traditionally a difficult market for foreign companies to penetrate. However, through pressure from the US government in the 1980s, Japan has opened its gates to overseas competition. Nowadays imports to Japan are increasing, as there is greater consumer demand for more variety in products as well as a general demand for western paraphernalia.
Japan shares bi-lateral agreements with many Asian nations as well as Australia. Australian and Japan share an excellent relation based on over 100 years of bi-lateral trade. Through the past few decades however, the Australian export opportunities have dramatically increased. This is especially true for Japans’ regional markets such as Kansai. Australia exports over $30,000 million to Japan and imports around $17,000 million worth of goods and services. Australia is in a very good position, as it is one of few countries that has a trade surplus with Japan.
DEVELOPMENT OF TRADEThe Agreement on Commerce between the Commonwealth of Australia and Japan, 1957, was the basis for the Australia and Japan trade relations. Although this was a largely opposed idea (WWII), prime-minister Robert Menzies went forward with the plan. This was mainly due to the potential opportunities for Australia.
The next treaty was the Basic Treaty of Friendship and Cooperation between Australia and Japan, 1976 (Nara Treaty). This particularly broadened the relationship between Japan and Australia.
The late 1980s saw a sharp rise in trade between the two countries as import and export quantities increased. From this time onwards, Australia’s trade relations quickly increased and trade produce variety expanded.
Another key item was the Joint Declaration on the Australia-Japan Partnership, 1995. Prime-minister Paul Keating presented this to Japan. This further developed trade between the two nations.
Annually, rates of import and export have been increasing by 10%-15% or keeping stable with two high points at late 1970s and 1980s. However, last year the growth for both export and import were at 9.1%.
CURRENT TRADE STATISTICSAustralian exports to Japan (annually) total to approximately A$31,076 million. Australia’s import with Japan is much less at A$17,335 million. In 2006, 4.8% of all imports to Japan were supplied by Australia and 1.9% of all Japanese exports were to Australia.
The major exports to Japan from Australia include:•Coal•Iron Ore•Bovine Meat•AluminiumThe major imports from Japan include:•Passenger Motor Vehicles•Transporting Goods Motor Vehicles•Refined Petroleum•Civil Engineering EquipmentThis can be seen in the following table:The following is the trade statistics for the past nineteen years.PROSPECTS FOR TRADE IN THE FUTUREThe largest prospect for the future is certainly a Free Trade Agreement with Japan. Although these have been underway, they have not been extremely successful. Another talk is planned for APEC as well as November 2007. The main aim of these talks is to discuss the advantages and