UK and Australia Country Project part 2 Mathematics & Economics Essay

I.Trade in G&S (by 10/26)
A.Globalization of trade. (Jennifer Xu)
* Pugel includes a table on p. 19 (reproduced here) showing that trade has increased for his sample countries. How large was trading as a percentage of GDP for your country a few decades ago? In the most recent year for which data are available？
About ten years ago, Australia had a GDP of 1.397 trillion United States dollars. In 2018, Australia had a GDP of Australia was recorded at 1.434 trillion United States dollars. The country has continued to grow and has a strong economy. The GDP has grown continuously since 2011, which can be attributed to a favorable business environment that enhances trade with its partners.[Data Commons. Australia. n.d. October 26, 2020, .]
B.Transportation.(Vivian mou)
* How are most of your country's trade conducted (road, rail, water)?
As one of the world's largest countries, Australia keeps staying active in international trade and improving its business development, and transportation plays an unparalleled role in maintaining Australia not being isolated from other countries. Australia has all different ways of transportation, including air, road, rail, and waterway. Since Australia's unique geographical location, it has to enhance and improve its transportation to receive better technology and goods from other countries or export goods to gain economic profit. Since Australia has a long history of shipbuilding, transportation on water is like its symbol, and the technology keeps upgrading, which makes waterways a reliable way for transportation. Also, rail is critical in Australia, especially for internal transportation of trade. Rail helps Australia reduce its transportation cost and increases efficiency and environmental benefits. Besides, the flight is also essential for daily uses, and business uses.[Austrade < /International/Buy/Australian-industry-capabilities/transport>.]
* Have there been significant changes over the last several decades in how trade is conducted?
Shipbuilding is one of the most important industries in Australia since ancient times because Australia used to rely on water for transportation heavily. To make water transportation more convenient and cheaper, Australia keeps developing new techniques and skills, so its ship manufacturing industry is still advanced and reliable in the international market until now. In the last several decades, Australia has developed its rail and turned it into the world's sixth most extensive network. Rail contributes over $26 billion to its national economy and is at the forefront of innovation, productivity, and the world's best practice, making rail an integral component of the total logistics supply chain in Australia now. Additionally, Australia has well-known expertise and skills in aviation, especially in airport infrastructure and aerospace technology. This achievement makes aviation perfectly merge with people’s daily life and business usages.[Australian industry capabilities. .]
* Have there been any significant upgrades to transportation facilities used for international trade that have reduced transportation costs?
Australia is a country that is famous for its goods and services industry, and it never stops adopting the newest technologies to fit the fast economic growth and social changes. Australia's heavy haul railways carry some of the world's heaviest and longest freight-trains, so it makes one trip, takes more cargos, and costs less money. This significant change causes export and import to become much more convenient and cheaper for Australia and other partner countries. Also, since Australia's shipping building is famous for efficiency and innovation, it makes ships made from Australia contain more capacity, making international trade faster and easier. For example, many companies in Australia provide Custom-built ferries to solve some specific problems people face when they ship goods overseas. Finally, due to the advanced technology Australia has in Aviation, it helps over 50 countries in the airport building and Aviation related problem-solving. It makes Australia reach out to more countries and trade with them, and the advanced technology is helping Australia find the best way for it to ship at the least cost and shortest time.[United States Trade Representative. Accessed October 27, 2020. .] [Australia - Economic Forecasts - 2020-2022 Outlook, 2019. .]
C.Impact of COVID-19 on Trade. (Jennifer Xu)
* How has the COVID-19 pandemic and its economic effects affected the volume of your country’s imports? Exports?
The emergence of the coronavirus has dramatically affected how business is conducted. One of the significant effects on trade is the disruption of the supply chain. Many domestic businesses that rely on the movement of people were affected. The volume of imports and exports was reduced because the virus resulted in limited movement between different countries. There were limited goods that could be exported and imported into the country.[Jenkins, Louise, et al. State of trade: COVID-19's impacts on trade regulation and supply chain risks. May 25, 2020. October 23, 2020 .]
* Are there categories of goods and services that have been significantly affected?
While the impacts of the virus can be experienced in all sectors of the economy, certain areas have been severely affected by the outbreak. One of the severely affected sectors was tourism. Many tourists in Australia come from other countries. With travel restrictions across the world, the country could not receive foreigners or visitors from other countries. Moreover, domestic tourism was also discouraged since people were placed on lockdown.[Paul Hardman; Phoebe Yin. COVID-19: (Australia) COVID-19 Migration FAQs. April 06, 2020. October 26, 2020, .]
* Can you identify the shock's specific source (e.g., canceled orders, suspension of exports by trading partners)?
Certain areas led to the economic shock that was experienced within the country. The lockdown that was enforced after the outbreak limited business transaction and reduced the consumption rate of certain products. Also, the travel ban limited people's movement across borders.
D.The Heckscher-Ohlin theorem and trade patterns. (Breylen Ammen)
* In what factors of production, e.g., capital, unskilled labor, is your country relatively abundant? Relatively scarce?
Australia is the sixth-largest country in the world by landmass. This makes land a significant factor; however, due to low rainfall and nutrient deficiencies in much of the country, the land is not ideal for agriculture, although some occur. The land is more used to grazing animals such as sheep (Encyclopedia Britannica). Australia's large landmass has another benefit: natural resources. Mineral resources and fossil fuels, particularly coal (Parliamentary Library), are a large factor. Biodiversity and geological resources (e.g., beaches), what I will call 'beauty,' is also abundant. Being a developed nation, Australia has a relative abundance of skilled labor (Parliamentary Library). Schooling is compulsory at younger ages, and the government provides public education. Higher education is also available with a significant number of universities. Australia is also relatively capital abundant as it is a developed country with a small population(Encyclopedia Britannica).
The Primary factor that Australia is relatively scarce in is unskilled labor. As mentioned above, they have a small population given the size of the country and scale of its economy, and the general population is educated (Parliamentary Library).
* Does the actual pattern of goods trade, i.e., what goods your country imports and exports, appear to be consistent with your country’s factor endowment?
Australia’s top exports align perfectly with Australia's relative abundance in extractable natural resources. These are Australia's top exports in descending order: Coal, iron ore, natural gas, gold, and aluminum oxide. In descending order, these are Australia's top imports: refined petroleum, cars, crude petroleum, delivery trucks, and telecommunications equipment/parts (OEC). These imports more loosely fit Australia's relative scarcity; for instance, telecommunications equipment uses a degree of unskilled labor for assembly; however, it is also capital intensive. Oil is also not incredibly surprising, as Australia's fossil fuels mostly lie in coal and natural gas, not having the kind of oil resources places like gulf states do. On the other hand, cars and delivery trucks seem to run directly against Australia’s relative abundance of skilled labor and capital.
* Does the actual pattern of services trade, i.e., what services your country imports and exports, appear to be consistent with your country’s factor endowment?
Australia’s export services are dominated by education-related travel and other personal (recreational) travel, with these two services comprising 64.8% of Australia's export in services (Dept of Foreign Affairs and Trade). Recreational travel fits well with Australia's abundance in what I referred to as 'beauty' above, and education services are consistent with an abundance of skilled labor. Australia's import of services is dominated by personal travel, with this alone making up 45.6% of imports. The only other broad category of imports is transportation, which comprises a further 18.4% of imports (Dept of Foreign Affairs and Trade). Recreational travel is inconsistent with Australia's 'beauty' factor; however, this makes sense given that novelty and variety are often valued when traveling. Transport services are also somewhat inconsistent with Australia's abundance in the capital. However, given it is separated by an ocean from any potential trading partner or travel destination, this seems to make sense.
* Are there significant categories of imports or exports (SITC or H.S. codes) that have experienced significant changes over time?3357563114300
Natural gas (HS 2711) as an export significantly increased, going from $163.8M in 1988 to $13.79B in 2016 (U.N. Comtrade). Comtrade data is incomplete for this code after 2016. However, this government report shows natural gas continuing to grow with a 23.7% increase over five years, leading up to the 2018-19 fiscal year.
Cereal (H.S. 10) exports have experienced a rise and fall since 1988. In 1988 exports were $1.5B; they then rose to a high of ~$8.6B in 2012 and steadily declined to $3.3B in 2019 (U.N. Comtrade). For a visual representation of change over time, I have created the graph on the right out of the U.N. data using R studio.
Refined oil (HS 2710) imports have followed a somewhat similar pattern to the export of Natural gas, starting low in 1988 at $583M and growing (somewhat inconsistently) to $18B in 2019 (U.N. Comtrade).
E.New trade theory. (Ian Smith)
* To what extent is your country's trade intra-industry vs. inter-industry? (You might lo...