Globalisation

Globalisation Australia
It is now an established fact that it is not sovereign states, but international law that governs trade between nations. This is further elaborated by Jayasuriya (1999: 446) in his journal where he states that, globalisation is ‘rupturing the internal sovereignty of the state’ . Thus, governance and political issues are external factors of porter’s diamond that affect nations, and are perhaps the most important issues outside Porter’s diamond that could have a significant impact upon a nation and its trade. This is apparent in the analysis of Australia and its globalisation.

From the early 1950s Australia had traditionally high levels of protection for many industries, including the textiles, clothing and footwear (TCF) and the agricultural sectors. The Australian government protected its domestic industries from overseas completion by introducing trade barriers such as tariffs and quotas   and non-tariff barriers ranging from explicit quotas and licensing schemes to local content requirements and health and safety standards that constitute significant obstacles to trade that are not captured by average tariffs   (Edge, 2006 and Dollar & Kray, 2004)

In the 1980s a new era of globalisation and trade liberalisation emerged, changing the way companies around the world engaged in business. Multilateral tariff reductions, the expansion of world financial markets, increasing capital flows and the floating of exchange rates opened up world markets . As hard as Australia attempted to isolate itself from the effects of globalisation, it had few options but to succumb. Gradually, the federal government of Australia began to reduce nominal tariff rates on imports and by July 1996 tariffs on most manufacturing industries were phased down (Edge, 2006) .

When the effects of negotiated tariff reductions expanded world trade and multinational corporations (MNCs) boosted flows of foreign direct investment (FDI), initiating an era of increased...