Critical Review of International Marketing Environment in Australia
Name : Gabriel Tham Jing Wei
Student ID : 26421674
Tutor : Ms.Janie Chin
Tutorial day and time : Monday, 10am
International marketing is the export of a country’s product or service globally to the rest of the world. International marketing is done in order to lower overall production costs, expand to new markets to increase competition, and of course, to maximize profits in the long run. However, in order for a firm to gain access to conduct business beyond their nation’s horizon, the firm must oblige to all the policies and regulations stated by the government of the targeted country. Every nation ...view middle of the document...
Not only does it provide financial assistance to SMEs, it also provides support in the forum of exporting intellectual property, and providing knowledge of exporting products beyond Australian shorelines (ATC, 2014).
The Free Trade Agreement (FTA) is an international agreement that removes all barriers to trade in order to strengthen trade and business ties. With the FTA, Australia would increase their economic ties with other related countries. The FTA plays a significant role in supporting global trade liberalisation and is encouraged by the World Trade Organization (WTO) as it creates complex yet efficient trade agreements. Australia has nina FTAs already implemented with countries such as the US, New Zealand, Singapore, Thailand, Chile, Association of South East Asian Nations (ASEAN), Korea, Japan and Malaysia. To top it off, Australia has recently finalized a FTA agreement with China in November 2014 which is a significant improvement for Australia’s economy as China itself accounts for 23% of Australia’s total trade (DFAT, n.d).
In January 2014, Australia would join 13 other countries of the WTO to be part of the Environmental Goods Agreement (EGA) that aims to remove tariffs on a wide range of environmental goods such as wind turbines, solar panels, and water recycling technologies. Due to the rising trend and demand for businesses and their machines to be eco-sustainable, the global value for these environmental goods are expected to rise to US$3 trillion by 2020 from US$1 trillion in 2012 (DFAT, n.d).
Evaluation of policies : EDMG
The EDMG aims to provide assistance to SMEs by providing reimbursement of up to 50% of expenses incurred for promotional exportation value of over $15,000 and it provides up to eight grants to each legitimate applicant. To be eligible for this policy, the pre-requisites must be fulfilled. Such as having to spend at least $15,000 in a span of two years on export marketing expenses, having an income of not more than $50 million in the grant year, and must have at least promoted the export of goods and services and intellectual property (ECA, n.d).
Through the EDMG, the cost for firms from developing export markets is lowered, which encourages exports on receiving firms. The receiving firms would then share their export experiences to other firms, which also encourages other competitors to follow suit to increase the number of exports. This would boost the overall productivity, ultimately stimulating sales. With the number of increased exports, the exchange rate of Australia would also increase as the term of trade of Australia improves. As the exchange rate of Australia improves, the cost of importing goods to Australia would be lower. Thus, the demand for imported goods now increases. Hence, the terms of trades of Australia is improved even further when the imports are also increasing parallel to the number of exports. With the increase in number of imported goods, the competition within Australia...