Political And Economic Reasons: Employ Trade Barriers Essay


Discuss about the Political and Economic Reasons for Employ Trade Barriers.



Trade and investment in Australia is a controversial matter that has gained interest for international organizations like world trade organization (WTO) and foreign investors. A review of the state of investment and trade in Australia describes the country as a major contributor to international trade identified by Australia's economic diplomacy pillars ("Economic diplomacy", 2017). Also, there are barriers to regulate trade that the Australian government has considered to employ for various economic and political reasons. The most common barrier to trade are tariffs; taxes imposed on imported and exported goods. Several economists suggest that trade barriers in Australia have been formulated mainly for political and diplomacy reasons rather than economic reasons.

The primary economic reason by the Australian government was to boost the overall wealth being of Australia. The major trade barriers were implemented to create links with other economically stable nations that with a market growth in the global environment. Economic arguments for government intervention in trade suggest that the strategic rated policy as the main reason for Australian government’s intervention. Strategic trade policy provides that the government will protect the forms of its citizens by providing advantages to curb international competition and overcome barriers to entry in international markets (Feenstra, 2015).

The government was focused on embracing trade tariff to raise the economic status of Australia. Evidently, tariffs generate government revenues in the form of taxes. Considering that Australia is an economically stable nation, the tariffs were imposed with an expectation of trade improvement. It was expected that the tariffs would maximize Australian economics’ welfare while protecting the domestic industries of its citizens. However, WTO has raised concerns to reduce trade restrictions, reduce tariff rates or eliminate tariffs to increase economic efficiency. From an economic standpoint, Australia has imposed trade barriers for the purpose of macroeconomic welfare and redistribution of income ("Review of Australian System of Tariff Preferences", 2017).

Furthermore, the government has imposed trade barriers for its political interests. The Australian government intended to employ barriers to protect the interests of certain groups particular producers at the expense of the consumers. Political arguments suggest further that the government intended to protect the jobs and industries for the benefit of national security. The latter is the most common political reason for the Australian government to employ trade barriers. The Australian government objected at protecting industries such as aerospace and advanced electronics for the benefit of national security. Moreover, the government aimed at job protection to curb the political pressures by international employment unions and foreign producers (Thorpe & Leit?o, 2014).

In essence, over the recent past Australian government has employed several reforms in trade policies. The reforms have been attributed by the revolution in the international trade environment and intervention of organization like WTO. The political and economic reason for trade barriers has offered benefits regarding growth, income, and productivity in Australia’s overall economic and political standing.


Economic diplomacy. (2017). Department of Foreign Affairs and Trade. Retrieved from

Feenstra, R. C. (2015). Advanced international trade: theory and evidence. Princeton university press.

Review of Australian System of Tariff Preferences. (2017). Department of Foreign Affairs and Trade. Retrieved, from

Thorpe, M., & Leit?o, N. C. (2014). Economic growth in Australia: Globalization, trade and foreign direct investment. Global Business and Economics Review, 16(1), 75-86.

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