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Globalisation and trade liberalization are worldwide phenomena that have

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Globalisation and trade liberalization are worldwide phenomena that have significantly changed Australia's trading relationships over the past decades. Globalisation and trade liberalization are worldwide phenomena that have significantly changed Australia's trading relationships over the past decades. Traditionally , Australia is a highly protected country against foreign competitors by using methods of protection such as tariffs and subsidies. However, since the 1980s Aust and many of the world economies has faced substantial reductions in trade barriers in order to promote what we known as Free Trade. Australia gradually reduced its trade protections, which can be any actions by national governments that will give an artificial competitive advantage to domestic producers over foreign producers. The changes to the free trade and protection policies has caused a significant improvement in the number of Free Trade Agreements (FTA) and a shift in Australia's trading relationships, which in turn has affected firms, individuals and also the Australian government. Since the mid 1970s, Australia has started to reduce protection by cutting tariffs, tax on imports, from average tariff levels of 23% in 1968 -69 to 4.4% in 2001. Traditionally, the highly subsidized industries (any form of support to keep domestic industries competitive) are sectors such as motor vehicle and textile, clothing and footwear (TCF). These industries have a fixed low tariff level between 2000 - 2005, to allow them to restructure and become more internationally competitive. Australia's tariff reduction levels have gone way below those required by international trade agreement such as WTO agreement and the APEC. Australia in the last ... ... middle of paper ... ...d this would affect the voting ratios for the government as benefits of tariff reductions and free trade promotion would take a much longer period to arrive. Through the significant change of Australia's protection levels and the promotion of free trade, it is obvious that Australia's major trading partners is shifting from European countries to the high trading potential Asian countries. This is due the enormous demand in many developing countries, which results in a greater market for export. This has brought a positive impact on Australia's primary base industries such as minerals, therefore increasing the amount of export revenue for Australia. Free trade and the reduction in Protection result in the better performance of export as it generates Australia's economic growth, which in turn benefits firms, individuals and the government sectors overall.
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