2013 HSC COURSE

20 largest economies and the EU. Coordinated common economic policy. Similar to G7/8 but formed after the importance of emerging economies for global economic stability was realised

in the past australia was heavily protected despite being heavily reliant on trade - 'fortress australia'. 1973 Australia cut tarrifs 25%. Now australia is one of the least protected countries due to the advantages of free trade. Over 50% of m have no tarrifs with the key exceptions of the PMV and TCF industries which have been given time to adjust.

passenger motor vehicle industry. Currently 5% tarrif on m but in 2015 will go to 0%. AU $5 billion dollar subsidy 2010 "New Car Plan for Greener Future" given time to adjust to international competition

Textiles Clothing Footwear industry currently at 10% tarriff on m will go to 5% by 2015. 2016 TCF innnovation plan Au $406 million, Given time to adjust to international competition

Australia has the 2nd lowest agricultural protection in the world. Aus farmers Y are paid ~2% in subsidies. This is compaired to Japan 50%, Eu 20%. However Australia still protects through quarantine regulations

admined by Austrade. Main program export market development grants (EMDG) scheme which reimburses exporters for some promoting costs. Also gives market information etc... ~150 million in grants every year. result 2008 each dollar in grants generated Au $13.5- $27 in X

Australias tarrif levels are much below WTO standards however a 2011 review still found improvements needed in quarantine laws, certain foriegn investment restrictions, anti dumping measures and state government procurement practises

Short term: some m competing industries will go out of business. Lower tarrifs on resources = lower imput costs for firms. Long term: efficient firms restructure to compete globally. inefficient firms resources go to efficient firms

Short term: structual unemployment increases as inefficient firms and industries close. Consumers gain access to a wider variety of goods with increased quantities and decreased prices. Long term: Job opportunities increase in competitive sectors

Short term: cutting tarrifs may decrease revenue. May have adverse political consequences. Decrease in subsidies result in a decrease in government spending. Government spending on structural readjustment programs may increase spending. Long term: sustainable economic growth increases government revenue

Stats for 1989/90 and 2011/12. Rural: 23% X -->11% Services: 20% --> 16% Manufacturing 13% --> 9 % Metals and minerals: 33% --> 54% Other 11% --> 10%. Total X Au $61 billion --> Au $316 billion 14% GDP --> 23% GDP

The international division of labour refers to the breaking up of the production process in different locations around the world. (based on comparitive advantage)

TITFLI - trade, investment, technology, financial flows, labour, international business cycle

GWP = total value of world output of g + s over 1 year. since 1950 GWP has increased 10x World trade up 50x. 1990 trade US8.7 trillion 38% of GWP. 2011 trade US 49.9 trillion 71% GWP

technology espicially transport and communications

From 1995 to 2011. Manufacturing 62% --> 58% fuels and minerals 7% --> 8% services 20% food and agriculture 10% --> 6%

movement from high income countries to emerging economies (BRIC) 1995 high Y 82% world trade 2011 66% world trade. East asia and pacific 7% --> 17%

portfolio investment e.g. shares, forex, bonds ( <10% value, speculative) 2012- exchange traded derivates US $64 trillion. 2011 daily forex transactions US $5 trillion.

technology improvements and the deregulation of financiers

Foreign direct investment (long term, <10% value) 2012 US 1.7 trillion. Pre 2012 FDI --> developed Post 2012 FDI ---> emerging mainly through the growth of TNCs.

technology development e.g. standardised shipping containers and increase in international communications has increased trade, efficiency, FDI etc transport increases has also increased labour mobility and tourism access

increased in transport technology has lead to greater labour mobility however labour is still less international than other indicators e.g. increase in restrictions on immigration from poorer countries. ~200 million people have migrated for work (3% of global population) and 60% of migrants live in high Y countries. Brain drain from smaller advanced economies

synchronisation of growth rate between developed and emerging economies.

globalisation has lead to increased living standards in general e.g. people living on less than US $1.25 a day 1981 52% 2008 22% however inequalities still exist e.g. 21000 children die each day from poverty preventable disease. Impact of globalisation depends on growth and development

GNI = total Y of all residents in a country. 2012 Australia #12 at US $1.4 trillion however this does not take into account inflation, population, purchasing power etc... more accurate GNI ppp low Y - US $1123 high Y - US $43853

indicators of the quality of life e.g. HDI - takes into acocunt GNI per capita, life expectance, average years of schooling and expected years of schooling. #1 norway 0.943 #2 australia 0.929 last congo 0.286

set by the UN in 2000 with 8 goals including the aims to decrease the number of people living on < US $1.25 by 50% and ensuring universal primary education

developing economies - agriculture - primary. emerging economies - manufacturing - secondary. developed economies - services - tertiary

1. Global trade system 2. global financial architecture 3. global aid and assistance 4. global technology flows 5. domestic economies 6. domestic institutions in developing economies

1. high agricultural protection e.g. OECD total agricultural support 2012 US $250 billion e.g. 50% of farmers Y in Japan 2. Failure of WTO doha round Potentially it could have increase global economic activity by $520 billion by 2015 and lift >140 million people out of poverty (world bank estimates). 3. Expanding regional trade blocs 4. Dispute resolution process at WTO is expensive, complex and smaller countries are marginalised 5. WB 1% increase in admin costs lead to GWP decreasing by US $75 billion

1. FDI flowed tend to be directed at advanced economics e.g. 2011 LDCs received only 1% of total FDI. Majority of FDI goes to BRIC countries 2. increase in FDI and portfolio investmment has increased global economic volatility which hits developing countries more e.g. asian financial crisis. 3. international financial regulations are not up to date with globalisation - firms in advanced economies shift production and profits to avoid taxes while developing countries dont have the resources to do this 4. IMF serves advanced economies' interests as voting rights are based on contribution 5. developing nations large foreign debt e.g. 2010 - US $3.7 trillion

1. 2011 average aid given from advanced economies was 0.31% GDP when 0.7% was commited (only 58% given) 2. 1/6 of aid is phantom, 11% refinances past loans, 5% admin, and much is tied aid (purchase from adv economies) 2. aid often reflects military / strategic purpose

1. 'digital divide' - the uptake of new technologies is much faster in adv economies 2. developing economies cannot afford to produce their own technology as much is protected by IP rights 3. much of new technology is based on labour saving and health. Useless for developing economies who have an abundance in labour and main health risks are common infectious disease

1. dev economies are less abundant in resources 2. developing ecos has large labour but mostly unskilled + brain drain 3. dev little / no capital from I due to lack of national savings (from low Y) 4. dev dont have entraprenurial economy