Professional Documents
Culture Documents
On
Barrier to International business
Submitted to
Mrs. Nupur Rao
Faculty XIDAS
Submitted by
Sushil Benedict Lakra
PGDM III Sem.
Xavier Institute of Development Action and Studies, (XIDAS)
Mandla Road, Tilhari, Jabalpur (M.P.)
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Barriers to trade
To support local industries some countries place barriers to trade. While perhaps helping the
local industry in the short term, there is a cost to the nation’s economy.
Tariff (customs duty) — a tax on imported goods or services. Tariffs usually make imported
goods or services more expensive than the local version.
Subsidy — a benefit to local producers and export firms, for example, money to help lower
costs, tax benefits, and exemptions.
Quota — a limit on the quantity of a good that can be imported for a specific period.
Embargo — a complete ban on the import of a product for Economic, political, religious,
security or quarantine reasons.
Hidden barriers — quality, labeling, safety, and packaging requirements can make it
difficult to sell products overseas and add to final costs.
Australian exports have increased since trade and investment were liberalized in the 1980s.
Many countries have lowered their tariffs on imported goods so our products are cheaper for
people to buy. Some countries have also lowered subsidies (payments to their producers) so
that their producers had to become more efficient to compete globally. Therefore, Australia’s
exports of skilled goods and services are now cheaper in some countries and we can buy
goods from other countries, in a quality or style we want. The world is becoming more
specialized.
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Country Profile: Australia
Area: 7,682m sq km
Population: 20.7 million
Capital city : Canberra
People : 99% of the populations are of European or Asian descent
Languages : Mainly English with some other European, indigenous and
Asian languages
Religion(s): Predominantly Christian with Buddhist, Jewish and Muslim
Currency: Australian Dollar (A$)
Major political parties : There are seven registered parties. They are the:
Australian Labor Party (ALP), Liberal Party, National Party, Green Party,
One Nation, Australian Democrats, and Family First.
Prime Minister: The Hon Kevin Rudd MP (Leader Australian Labor Party)
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South Pacific Regional Environment Programme (SPREP).
Economy:
The current crisis has led the Government to introduce a series of stimulatory
measures and the Reserve Bank to make repeated cuts in the official interest
rate, encouraging first homebuyers to take some pressure off the rental
market. The Government's economic strategy has centred on providing
financial assistance to lower-income families and individuals, designed to
take some of the burden away from the most vulnerable.
The economy however continues to benefit from demand for resource and
minerals, and it is generally accepted that China’s continued growth – albeit
slower than previously thought – holds the key to Australia’s recovery on the
other end of the current crisis. Until then, a substantial rise in
unemployment predicted for 2009, a year that, the Government has said, is
expected to be difficult.
Trade
Australia has a largely affluent society and open and innovative economy,
resulting in growing foreign investment over the past decade. Australia
continues to be a strong advocate of increased trade liberalisation in the
World Trade Organisation and plays an active role in global trade talks.
Japan remains Australia’s largest export market, followed by China, the
United States, the Republic of Korea and New Zealand. Strong political,
economic and cultural links to the UK make Australia a more significant
market for UK exports than its comparatively small population might suggest.
In 2007-08, the UK was Australia's sixth largest merchandise trading partner
and seventh largest source of merchandise imports. Today the UK remains
Australia’s top European Union trading partner.
The UK sells more to Australia than to India or China, and Australia is the
UK’s 5th largest market for goods outside the EU. Agriculture, Mining, Oil
and Gas, Information and Communication Technology, Biotechnology,
Creative and Media, Marine, Railways, Food and Drink, Recreation and
Leisure, and Aerospace are all sectors identified as offering significant
opportunities for British companies.
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In 2007-08, two-way merchandise trade between Australia and the United
Kingdom was worth approximately A$16.8 billion. The services trade was
also strong in 2007-08, around A$4.7 billion in exports and A$4.2 billion in
imports. Recreational travel on both sides remains the strongest contributing
factor to the services sector.
Global Trade
(Source: www.fco.gov.uk )
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Trade Rules and Regulations
Trade Policy:
Having shielded its industry for most of the past decades behind tariff
protection, Australia began to reduce its tariff including in its most protected
industries such as automobiles and textiles in the 1980s. The Australian
economy has since reaped the rewards of tariff reduction through lower
prices of imported business inputs, increased productivity and improved
international competitiveness.
Import Controls
There are no special requirements for applying an import licence, nor are
there any quotas on imports. However, under the Customs (prohibited
Imports) Regulations, controls take the form of a) an absolute prohibition
meaning that import of these goods is banned in any circumstances; and b) a
restriction where imports are allowed only if written authorisation is obtained
from the relevant authorities, or if compliance with certain regulations is
met. For some commodities, import permits are required to facilitate
clearance of goods.
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While there are several ways of valuing goods for customs purposes, the
method most applied is the transaction value based on the price actually paid
for the imported goods.
Goods and services tax (GST) was introduced in 2000 and is payable on most
goods and services imported into Australia except for some essential
commodities. GST is levied at 10% of the value of a taxable importation
which is the sum of the customs value of the goods, any customs duty
payable, delivery costs and other expenses.
Australia imposes GST, wine equalization tax and luxury car tax on locally
produced and imported goods.
Customs Clearance
Importers wishing to clear their own goods should contact the Customs
Information and Support Centre for advice on Customs requirements and
operating hours. Customers should be aware of their obligations and base on
their assessments of import procedures. Penalties may be imposed for the
submission of incorrect or misleading information.
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Customs advises that purchasing goods over the Internet or mail order are
subject to customs controls. Restricted goods brought into the country require
an import permit. Goods may be imported duty and tax free if their value is
$1000 or less, with the exceptions of tobacco and alcoholic products.
However, multiple packages to the same addressee from a single consignor
arriving at the same time are liable for tax assessment.
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