What will global and Australian trade look like in 2020?
26 August 2009
A decade ago the Australian economy looked very different than it did now, we were in the midst of the 'dot.com' bubble andeveryone was talking up the 'new economy' and trying to disguise their strengths in old economy 'rock and crops' – i.e. mining and agriculture. In fact, at the Sydney Olympics in 2000, a famous Americanbusiness executive said Australia was too 'old economy' and if we didn't shift from mining and agriculture to be a 'new economy' software exporter like Taiwan, our dollar would sink to be worth 30 UScents.
Since then, of course, we've had commodity boom, a rapid rise in our terms of trade boom, the global financial crisis (GFC), a stimulus package, and the prospects of a global recovery(albeit a slow one). We're also a little bit less shy about admitting we've got expertise in mining and farming, and we've added environmental expertise to our export capabilities as well, particularly inrespect to helping large emerging economies with environmental problems such as China and India. In fact, China and India, have been a big story of the past decade in terms of Australian trade, aswe've been 'hugging the panda' and 'riding the elephant' for much of the past decade.
But that's the past. 10 years is a long time in terms of trade. What can we anticipate for the next decade or so?Let's start with three basic thoughts.
First, we can expect that trade will grow as a share of the global economy between now and then – and not just because of the impact on trade of the currentglobal recession means that there'll be a flying start.
The trend growth in trade has, of course, been true in general for a very long time now, and will tend to continue to be true into the future.On the one hand that is because there are gains from trade. It just makes sense. David Ricardo wrote the world's first 'self-help' book back in 1817, built on the simple premise that nations (and...
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