Australia's agricultural exports to certain East Asian markets fell by 35% in 2021 due to trade disputes, prompting a prompt shift in Australia's trade policy. In contrast, trade with emerging markets in Southeast Asia grew by 4.5%. Non-tariff barriers, such as biosecurity inspections and customs delays, continue to pose challenges, raising logistics costs for exporters. These regulatory compliance costs have reduced profit margins for small-scale wine and beef exporters.
Meanwhile, domestic GDP shrank by 1.5% during the mid-2021 pandemic lockdowns, with retail and hospitality sectors hit hardest. However, personal savings reached record highs as consumers cut back on discretionary spending.
The newly minted Australia-UK Free Trade Agreement (A-UKFTA) is expected to eliminate tariffs on 99% of Australian goods, significantly boosting agricultural and mineral exports to the UK. This deal is projected to increase bilateral trade by AUD 10 billion over the next decade. Supporters state this will provide Australian firms with preferential access to a high-income market of 67 million consumers.
The final paragraph refers to a projected boost in export demand and trade volume under the new bilateral agreement.
Explain one advantage of international trade for developed countries.
