Trade Policy Today: A New Approach for a Changed World

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Trade and foreign investment policies, both here and abroad, have a major impact on the performance of Australian farmers. The global environment affecting trade and foreign investment has changed markedly over the past 10?15 years, creating new challenges for policy.

The volume and pattern of global trade and investment flows has changed dramatically due to a number of inter?related developments, including unprecedented structural shifts in the world economy and cyclical trends. These developments have changed the politics of trade and foreign investment and the choices made by policymakers.

While traditional forms of protection have generally declined, new forms of protection and new arguments for protection have emerged. The way trade is being liberalised has also changed. There has been no comprehensive multilateral trade liberalisation for 20 years, while bilateral and regional free?trade agreements have proliferated.

This report highlights these key developments affecting trade and investment policy over the past 10?15 years. The report argues that in the current environment, the present approach to trade policy based on the mercantilist idea that only exports are good is unlikely to achieve the reforms necessary to promote prosperity for all. The way forward is to promote a better understanding of the benefits of reform amongst policymakers and the broader community through transparent policy processes.

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