A Comparative Narrative Term Paper Example | Topics and Well Written Essays - 1000 words

A Comparative Narrative - Term Paper Example Both the countries have an open economy. Their relations have enhanced rapidly after the free trade agreement between them, which reduced their existing trade barriers (Berkelmans, Davis, McKibbin & Stoeckel, 2001, pp. 1-112). On the other hand, trade relation between China and the US has been a topic of serious discussion in recent times. Due to sustained growth in economies of both the countries, there has been a considerable enhancement in import and export activities between them (Wang, 2010, pp. 165-210). This paper intends to analyze the present trade or business relations between the countries of China and Australia with the US. Furthermore, the paper would aim to present a comparative analysis with regard to the business relationship between Australia-US and China-US. Discussion Trade is an important aspect for economy of any country. In the modern day context, trade between countries has expanded rapidly primarily owing to the enhanced globalization. In this portion of the p aper, the trade relations of Australia and China with US would be exemplified. Trade Relations of Australia with the US The two nations i.e. Australia and the United stated share a healthy trade relationship. Both the countries share many cultural and traditional values among them. Trade is equally important to both the countries. Approximately 11% of the Australian exports are conducted with the United States. Moreover, the United States is the origin of one-fifth of the imports of Australia (Garnaut, 2002, pp. 123-141). The US is one of the major single investors in Australia. The main source of finance of Australian’s firms is from the US investors. The extent of merchandise and services trade between the two countries is quite positive. It was observed that in the year 1999, the total trade involving the two countries was valued at around US$23.3 billion. 90 % of trade deficit between the two countries is in terms of merchandise and the remaining 10% is of services (Berke lmans, Davis, McKibbin & Stoeckel, 2001, pp. 1-112). Both the countries possess an open economy. To enhance their relation in terms of business, the two countries have undergone a free trade agreement (FTA) to minimize the existing trade barriers between them by a considerable extent. Both the countries have been recognized to be aware of the economic gains that would arise from the agreement. After the agreement both the countries have experienced an increase in welfare (i.e. distinguished by household consumption) and production (i.e. recognized by GDP) due to the reduced barriers. Australian welfare continued to rise from 0.3 percent to 0.5 percent. After the agreement, Australia enjoyed a US$2 billion annual increase in Gross Domestic Product (GDP) i.e. 0.33 percent increase. Similarly, the US also experienced an increase of US$2.1 billion annually in their GDP i.e. 0.02 percent increase. It can be seen from the GDP scenario that the Australian economy was more benefitted by the trade agreement than the US economy. Overall, there was an optimistic economic gain for both the Australian and the US economy from the trade agreement. The undertaking of the agreement would further increase the trade among the two nations in the future (Berkelmans, Davis, McKibbin, & Stoeckel, 2001, pp. 1-112). Nevertheless, there are certain barriers in relation to trade that prevail among the two nations. For the United States, the trade of dairy, sugar, shipping and commercial vehicles has certain barriers. The barriers to Australian sugar exports generate from high tariff which is almost equal to 80%. There are certain other barriers on trade of cotton, financial and metals services among others that exist for Australian