Global trade and legal challenges for Australian companies trading with Brazil
Global trade is the exchange of goods, services, and capital across international boundaries. A country that sells goods and or service to another country exports these goods and services to the global market. The goods and services become imports to the recipient country. Global trade is important to any country because it adds to growth in Gross Domestic Product (Helpman, 2011). Global trade allows nations and consumers to acquire and explore new markets. The consumers and countries are also exposed to a variety of products, services, and technologies. Global trade has been present throughout history, since the times of salt road, and Silk Road. Global trade success always depends on political stability of different parts of the world for business to take place between countries (Birkbeck, 2011). This essay will illustrate the relationship between Australian companies and Brazil in terms of global trade. The essay will also cover the legal challenges that face these companies during trade.
Brazil provides a rich market for goods and services from Australian companies. However, there are many legal challenges that make trade in Brazil complex. The Australian administration has domesticated and follows the international laws strictly. All companies originating from Australia must be legally registered with the Australian authorities. To be registered, these companies must meet high threshold standards of integrity. Corruption, dealings with illegal individuals and groups like terrorists is not allowed by the Australian authorities. The businesses in Australia must have registered Intellectual Property rights which are very difficult to protect in Brazil because the government does not protect these companies once they go trading in Brazil (Irwin, 2011). The investors have to seek the interpretation of the international agreements and also file protection rights to Brazilian authorities. Brazil continues to experience challenges in its taxing systems since it is a developing economy unlike Australia. This affects the trade relationships between the Australian companies and Brazil.
Australia and Brazil are the two largest countries found in the Southern Hemisphere. Trade between them has been in existence for a long time. For instance, in 2007-2008 trade in merchandise from Australia was A$1,040 million, while the exports to Australia from Brazil amounted to A$938 million (Bayari, 2012). Australia’s major export products include medicaments, coal, nickel, and motor vehicles. On the other hand, Brazil exports animal feeds, fruit juices, pig iron, and aircraft.
Both Brazil and Australia possess unique characteristics that make global trading effective as well as their market attractive. Firstly, Brazil demonstrates a history of peace throughout its transitions. For instance, in 2013, there was an up rise of different kinds of protests that hit the nation including fighting for more affordable public transport costs. Instead of violence, the protestors took to social media, which exposed more hidden issues such as corruption in the FIFA World Cup. Brazil holds a strategic partnership with Australia (Cant, Strydom & Jooste, 2009). This gives the leaders an opportunity to hold regular meetings and consultations after every two years. In these meetings, trade relations are enhanced through strategic dialogues that aim to improve the bilateral links in education, science and technology, as well as the energy sector.
According to the world statistics, Australia holds the 12th position in terms of economy size. In addition, its GDP is ranked fifth in the world. Australia has over the years sustained its economy prosperity by enhancing economic diplomacy with its trading partners from time to time. It has also sustained global trade by ensuring a continuous flow of international investment with different countries including Brazil. The prosperity of Australians is also an important factor that is often considered by the government. This prosperity is ensured through the sustainability of economic diplomacy. Australia has also ensured a consistent flow of investment in and out of the country in all sectors including the private sector. Politically, Australia offers a safe and low risk environment for trade. The country maintains a strong history of peace.
Brazil remains attractive to its trade partners due to several characteristics. First, the country offers a healthy environment for competitive business for Australia as well as other countries. This environment has proved to be favorable for all investors regardless of their size of business. Secondly, it is important to note that Brazil has a high population. This provides large market for imports (Mahrenbach, 2013). Additionally, the large population offers large labor force for the Australian manufacturing companies in Brazil.
It is recommended that the Brazilian government establishes policies that protect businesses, intellectual property. The government should also ensure that the tax system remains consistent throughout the trading periods.
In conclusion, trade between Brazil and Australia is one of the most successful ventures in the world today. This is because the two countries possess market attractiveness that has ensured sustainability and continuity of business. Australian investors have remained attracted to the Brazilian market due to their favorable trade policies and political environment. However, several legal challenges face the companies. These include the long time taken to resolve trade disputes.
References
Birkbeck, C. (2011). Making Global Trade Governance Work for Development: Perspectives and Priorities from Developing Countries. Cambridge: Cambridge University Press.
Cant, M. Strydom, J., & Jooste, J. (2009). Marketing Management. Johannesburg: Juta and Company Ltd.
Helpman, E. (2011). Understanding Global Trade. NY: Harvard University Press.
Irwin, D. (2011). Trade Policy Disaster: Lessons from the 1930s. Massachusetts: MIT Press.
Mahrenbach, L. (2013). The Trade Policy of Emerging Powers: Strategic Choices of Brazil and India. NY: Palgrave Macmillan.
Bayari, C. (2012). Australian Economy and Neo-liberalism: Manufacturing, Trade and Bilateral Links with Japan in the Post-Keynesian Age. Massachusetts: LIT Verlag Munster.