Please refer to the document attached below
MAE 213 International trade –trimester 2, 2020 - Written Assignment MAE 213 International Trade – Trimester 2, 2020 Written Assignment 1 MAE 213 International Trade Written Assignment Trimester 2 2020 General Details 1. This is an individual assignment. While you are allowed to discuss the questions with other students you need to submit your own original work. 2. This assignment has in total 100 marks that that correspond to 20% of your final marks. 3. Once completed, you need to submit your ‘Microsoft Word’ document via CloudDeakin. You must submit a single file only that contains a cover page with your name and student ID. You will not need to submit a hardcopy. 4. The assignment submission deadline is 8:00 pm, 14 September 2020. MAE 213 International Trade – Trimester 2, 2020 Written Assignment 2 Assignment Details Please read the article “Indonesia’s win against Australia’s tariff regime may embolden others” by Emma Connors from Financial Review on May 18, 2020. Note that students need to answer questions 1 and 2 below based on the contents of the article. You can find the article following this assignment’s questions. 1. Please graphically illustrate the dispute between Australia and Indonesia using concepts of demand for A4 copy paper and supply of A4 copy paper. Hint: you need to be able to draw the equilibriums in autarky and after Australia and Indonesia trade freely with each other. Then you need to illustrate what happens when Indonesia starts applying dumping to its A4 copy paper exports to Australia. (20 points) 2. The articles quotes Australian Trade Minister Simon Birmingham as saying in a television interview the following: “It was a mixed determination. They won some points, we won on others….” What are the points won by Australia and the points won by Indonesia? Please explain your answer thoroughly. (20 points) 3. Assume that the world consists of only two countries: Australia and Indonesia. Australia’s demand curve for A4 copy paper and Australia’s supply of A4 copy paper are D= 100-20P S= -20+20P Indonesia’s demand curve for A4 copy paper and Indonesia’s supply of A4 copy paper are: D*=80-20P $*=40+20P where D, S, and P denote demand, supply, and the price in Australian dollars, respectively. Please answer the following questions: If Australia and Indonesia can freely trade with each other, please graphically show the trade patterns between them? Specifically, which country will be the exporter of A4 copy paper? What is the price of A4 copy paper in free trade? What is the volume of their bilateral trade? (20 points) 4. Given the information in Question 3 assume now that Australia’s government decides to impose a specific tariff of AU$ 1 on Australia’s A4 copy paper imports from Indonesia. The government may ask domestic consumers who buy the imported A4 copy paper to pay the tariff. Alternatively, the Australian government may ask the Indonesian producers to pay the tariff if they sell A4 copy paper to Australian consumers. MAE 213 International Trade – Trimester 2, 2020 Written Assignment 3 Please graphically show that the effects of the tariff on the patterns of trade are the same no matter whether Australian A4 copy paper consumers or Indonesia’s A4 copy paper producers have to pay the tariff. Hint: Please determine and graph the effects of the tariff on the following: the price of A4 copy paper in each country, the quantity of A4 copy paper supplied and demanded in each country, and the volume of trade. Note that the tariff will influence Australia’s import demand if Australian consumers of A4 copy paper have to pay the tariff. Alternatively, the tariff will influence Indonesia’s export supply if Indonesian A4 copy paper producers have to pay the tariff. (20 points) 5. Determine the effects of the specific tariff on the welfare of Australia’s producers, consumer, and the government. (20 points) End of the Assignment’s Questions MAE 213 International Trade – Trimester 2, 2020 Written Assignment 4 Indonesia's win against Australia's tariff regime may embolden others Emma Connors South-east Asia correspondent FINANCIAL REVIEW May 18, 2020 – 12.00am Sydney/Jakarta | After a three-year battle against Australian anti-dumping duties, Indonesian manufacturers expect to resume A4 copy paper exports in four months – but not everybody is happy with the resolution of the widely watched dispute. Indonesia and Australia have agreed on a September implementation date, the final step after the WTO's Dispute Settlement Body found in favour of Indonesia's claim that the Australian Anti-Dumping Commission had erred in its calculations. Simon Birmingham and Indonesian Trade Minister Enggartiasto Lukita sign a free trade deal in March last year. Australia and Indonesia have agreed to bury the hatchet and accept the latest WTO ruling. AP In December the WTO found the method ADC investigators had used to calculate the cost of producing A4 copy paper in Indonesia was faulty. While Australia's approach to determining underlying prices was acceptable, its methodology was not, the WTO found. The ruling was not the damning verdict on Australia's aggressive use of anti-dumping measures that some of its trading partners were hoping for. Australian Trade Minister Simon Birmingham said in a television interview on Sunday "it was a mixed determination". https://www.afr.com/by/emma-connors-h0yqhv https://www.afr.com/world/asia/indonesia-wins-trade-dispute-against-australia-20191205-p53gzw https://www.afr.com/politics/federal/australia-suffers-embarassing-wto-defeat-20191211-p53iz3 MAE 213 International Trade – Trimester 2, 2020 Written Assignment 5 "They won on some points, we won on others, and we will respond and rectify those issues because we operate according to the global rule book, and that’s the way we play it," he said. However, Indonesian analysts maintain the decision has wide-ranging implications. "It was a great achievement," said Fithra Faisal Hastiadi, researcher and lecturer at the University of Indonesia. "This victory can have a systemic impact. It should dissuade Australia from arbitrarily applying tariffs to other countries." The value of Indonesia's A4 exports to Australia dropped from $US34.4 million ($50.3 million) in 2016 to $US19 million after the duties were imposed. Exports ceased altogether after Indonesia lodged its complaint with the WTO on September 1, 2017, alleging Australia's actions were inconsistent with the WTO's Anti-Dumping Agreement. Two weeks after the complaint was lodged, China and the United States requested to join the WTO's consultations. Ten days after that, the European Union piled in. After a panel was formed to investigate the matter, Canada, India, Israel, Japan, the Republic of Korea, the Russian Federation, Singapore, Thailand, Ukraine, and Vietnam also indicated an interest in participating in the panel proceedings as third parties. Of interest to many was Indonesia's challenge to the ADC's use of what it described as a "particular market situation" to justify its use of price calculations other than the actual price the good was sold for in its home market. Indonesia's argument on this matter failed to convince. Australia's underlying approach to determining prices was acceptable, the WTO panel found. Its methodology was not. "We were not able to disprove the particular market situation that Australia alleged. So we did not succeed in suing back," Dr Fithra said. The basis for our victory is the comparison of export prices with domestic prices – Australia used calculations not in accordance with WTO standards. So we may not have won all our claims but it is still a victory." While Australia and Indonesia have agreed to bury the hatchet and accept the WTO ruling, one of those countries keenly watching the outcome – Russia – made its displeasure known. Earlier this year, Russia indicated it had numerous concerns with the ruling, which it said undermined the security and predictability of the multilateral trading system. Among other complaints, Russia criticised the panel's interpretation of “particular market situation”, which, it said, would allow investigators to find dumping where no dumping existed. Last week, long-simmering tensions over Australia's use of anti-dumping measures surfaced again when confidential documents seen by The Australian Financial Review revealed China's anger over duties imposed on its steel and aluminium exports had influenced its planned tariff impost on Australian barley. https://www.afr.com/link/follow-20180101-p54rwk MAE 213 International Trade – Trimester 2, 2020 Written Assignment 6 Dr Fithra agrees Indonesia's success in fighting duties imposed by the ADC is likely to have broader ramifications. "If Indonesia can win [against Australia], other countries can also win, especially China. Other countries should be grateful to Indonesia," he said. Dr Fithra noted that when Indonesia brought anti-dumping cases against China, other trade between the two countries was not affected. China's fury against Australia, he said, was also a response to Australia's call for an independent investigation into the origins of a coronavirus. "With Australia, I think that this time China is harsher, because the Australian accusations about COVID-19 in Wuhan are very serious," he said. "China also always responds to political pressure on the country with economic pressure. That's China's weapon." Emma Connors is the South-east Asia correspondent. She was editor of the Perspective and Review sections. The online link to the