Patterns of Trade A Closer Look at Two Countries Essay

Patterns of Trade A Closer Look at two Countries - Essay ExampleThis led to very close ties with the Middle East, southeastern America, US, Singapore, Japan and different South East Asiatic countries in terms of trade. The failure of a number of South East Asian economies such as Hong Kong, Thailand and Indonesia in the 1990s had little impact on the economy of Australia. Even the governmental regularts in the neighboring countries, such as commotions in Fiji and Indonesia, have had no effect on Australias foreign trade (IMF, 1999).Australia mainly exports minerals such as gold, aluminum, iron ore and coal as well as revel equipment, machinery, cotton, wheat and meat. The largest importer of Australias products is Japan, which bought products outlay about $9 billion in 1999. The US was second after importation products worth about $4 billion. Other major importers are Italy, Malaysia, Indonesia, UK, Singapore, China, Hong Kong, Taiwan, New Zealand and South Korea. As gage be seen, eight out of the top twelve importers of Australian products are from Asia (IMF, 1999).Australia mainly imports clothing, aircraft equipment, pharmaceutical and medical checkup products, oil products, telecommunications equipment, computers and office machinery, transport equipment mainly motor vehicles, and machinery. The US is the largest exporter of its products to Australia, having exported about $10 billion worth of products in 1999. Australia also gets lots of imports from Malaysia, Italy, Singapore, Taiwan, Indonesia, New Zealand, South Korea, Germany, China, the UK and Japan (IMF, 1999).The recent value depreciation of the Australian dollar against the US dollar could affect its current trade deficit, since Australians exports have become cheaper than its imports. On the some other hand, a weak Australian currency gives it a competitive advantage over the US, Canada and other countries that manage raw materials to Japan among other countries. The main disadvantag e is that the imported goods become expensive since more bullion is required to buy the same product. Australians may therefore find imported goods too costly and even stop buying them, leading to a decrease in these imports while the exports continue increasing. If this continues, it could lead to a drop in the deficit level (OECD, 2003).Japan Table 1 Japans international trade course of study Value of Imports Value of Exports 1975US$58US$561980US$141US$1301985US$130US$1771990US$235US$2881995US$336US$4431998US$280US$388Source IMF financial Statistics Yearbook 1999Japan benefited from big trade surpluses in the 1980s mainly due to its diversified manufacturing sphere and its restrictive tariffs and regulations that locked out international competition in order to protect its local market (Krugman, 1992). However, Japans duty partners and competitors such as the US forced it open up its economy in the 1980s, resulting in increase imports and decreased surpluses in the 1990s, reach ing US$ 144 in 1994 and dropping further to US$84 two years later (IMF, 1999).Japan mainly imports fishery products, agricultural products, fuel, minerals, raw materials, machinery and equipment. On the other han