The Global Financial Crisis and Australia’s International Trade Position

Abstract

The current notion, rampant throughout the world today, is that the worst of the Global Financial Crisis (GFC) is over. Are we truly over and done with the GFC? The Global Financial Crisis was accompanied by an extraordinary collapse in world trade. Australia withstood the GFC much better than most other countries and, notably, trade was seen to be stable and steady. What is the rationale for this? This paper explores the impact of the GFC on trade and Australia’s distinctive position. How does Australia’s trade position look today? The Global Financial Crisis created major challenges and opportunities for Australia. But Australian products were seen to be more cost competitive in the global market. They retained strong relations with their traditional trading partners in the European Union and United Kingdom during the course of the GFC and stepped up trade with the emerging markets in Asia. Today, after the GFC, Australian exporters are seeing a slowdown in business due to waning demands from international markets. The GFC and today’s vibrant trade environment means that Australian industry must become accustomed to dynamic international engagement. This paper presents concise theoretical evidence supporting the relationship between trade and crisis before moving to the appraisal of the GFC and its impact globally and on Australia’s trade in particular. It presents key pragmatic indices that give a succinct indication of its scale and scope. The paper concludes with an assessment of the GFC’s implication for Australia’s International trade position and illustrates the factors supporting Australia’s sustainable trade position during the GFC.