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Outline The Effects Of Globalisation On The Australian Economy In Recent Years. Focus On Trade, Investment, Finance, Technology, And Labour.

889 words - 4 pages

In recent years, globalization has spread layers of influence in all directions of the world, including Australia. Globalisation is the growing economic interdependence amongst nations, as reflected in actual movements of trade, investment, finance, technology, and labour. Globalisation is not new, but the pace of integration of economies has quickened and economies are more closely integrated now than at any previous time. In many ways the linkages between economies are more intensive and far reaching than ever before.Trade has played a major role in the emergence of a global economy. Over the past decade, the volume of trade between nations has grown rapidly increasing from approx 40% of global output in 1990 to approx 50% in 2001. This increase in trade volume has resulted from a decrease in protection and free up the trade process as well as the increase in TNCs and world organisations. Since the mid-1980s governments have focused their policies towards the removal of trade barriers in industries that were heavily protected. Australia has traditionally had high levels of protection in industries such as the textiles, clothing and footwear industries (TCF) as well as motor vehicles and manufacturing sectors. Overall the government has reduced protection from approx 36% in the 1970's to approx 4% in 2000. Such cuts in protection have increased imports and increased efficiency leading to a comparable rise in exports and the trade balance, although it is still negative.Another key part in the increase of global trade is that played by transnational corporations (TNC's). They have such power that they heavily influence the decisions of what to produce and where this production will take place. In 1996, over half of global trade was either between or within TNC's. Their size and power has been a direct offshoot of the reduction of protection that has taken place and they have encouraged new technologies and have greatly increased competition. One last feature of trade is the formation of major trade agreements. For example the WTO enforces agreements on reducing trade protection, and multilateral agreements such as APEC have created a close integration between the countries involved in each. These developments have been a major force behind the increasing integration between economies and therefore globalization.The globalization of finance has also had a major impact linking economies around the world. Finance is the most globalised feature of the global economy because money moves quicker between countries than g/s, investment and labour. Following financial deregulation in the 1970's and 1980s and due to the dramatic increase in technology, international finance flows have expanded substantially. Financial flows take many forms with the fastest growing areas being interest rate, currency, equity and commodity...

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