The business selected for this research is Westfarmers. Westfarmers is the largest conglomerate in Australia with specialization in fertilizers, chemicals and safety products. Wesfarmers Limited, based in Perth, within Western Australia, is a renowned Australian conglomerate. It mainly operates in retail, industrial, fertilizers, chemicals, and products for enhancing safety, the primary market focus of Westfarmers is New Zealand as well as Australia. The firm is considered to be one of the largest in terms of revenue and takes its rightful place as one among the largest firms in Australia with a total of A$30.8 billion in the financial year 2020. The company is reputed to be the largest Australian private employer with a record of more than 107,000 employees. Initially, the firm started as a co-operative in the year 1914 so that they can supply commodities and required services to Western Australian farmers. After it was listed on the 1984 Australian Securities Exchange it turned into a retail giant. The Western Australian Farmers’ and Settlers’ Association, in 1914 formed the Western Australian Farmers’ Cooperative Limited with the purpose of acquiring assets of the Producers’ Union of Western Australia as well as focusing on the facility of merchandise and services to the rural community in Western Australian. The Westralian (West Australian) Farmers Limited possessed approximately 65 enterprises of local co-operatives working as representatives by 1919 (Group, 2022). Westfarmers Chemicals, Energy and Fertilizers are exported worldwide and is widely sought after in the Global Market. It is the largest conglomerate in Australia and has a wide variety of products and services under its portfolio. The Australian Export Regulations are business supportive and allows Westfarmers to export a large variety of its products to the Global and International Markets. Westfarmers exports are used in variety of industries worldwide due to its quality and prices. Westfarmers import a large number of raw materials from countries like China and India. Westfarmers require a lot of raw materials to manufacture its chemicals and fertilizers on a large scale. Hence, economies of scale is enjoyed by Westfarmers in terms of import and impeccable trade relationships. Australia’s import regulations allow Westfarmers to import the necessary raw materials into the country and produce its good and services, that are both used locally and exported back to different Countries. The technological, manufacturing and distribution capabilities of Westfarmers make this possible for them to be one of the most significant global supply chains in the industry (Gygli et al., 2018). Due to the China-Australia Trade Restrictions, Westfarmers have been equally affected. The restriction came around the time of the Covid-19 pandemic where China imposed trade punishments on Australia for mocking the Covid-19 scenario of China. This proved costly for Australia as large number of industries dependent of the Chinese resources were left stranded and scattering for alternate sources. The Westfarmers were affected equally with a large portion of their raw materials being derived from China. The trade restriction has serious current negative impacts and future negative consequences on the business and industry landscape of Australia’s. Especially, for globalized organizations like Westfarmers who not only imports raw materials and resources from international markets, but also supplies back to those markets in the form of exports. The restriction will severely disrupt the supply chain of Westfarmers and other international organizations alike.
The economy of Australia heavily relies on international investments and commerce so that they are able to provide prosperity and employment. International investments and trade provide probabilities for Australian companies to nurture. Trade agreements typically assist in the enhancement and sustainability of the competitiveness of Australian businesses by refining the market access in all trade industries such as investments, services, and products. This further enables Australian consumers to access a broader selection of high-quality services as well as goods. Foreign investment supports economic innovation and growth and through this process, they continually aid and enhance Australian economic development. The foreign investment assists by complementing the domestic savings: employment, output, and income would all be lower without it. To aid the prosperity and economic growth of Australia, it participates in several international organizations which include the G20, the World Trade Organization (WTO), the OECD, and APEC. On the basis of the case, Australia also participates in several World Expos. The events deliver a chance to entice investment, develop the export markets, and highlight the Australian business and innovation strengths (Trade and Investment, 2022). There can be many reasons why a country might bar trade. Issues like international disputes, conflicts, restrictions, sanctions, trade wars, trade agreements and so on. The very first reason for the barrier to trade in Australia if any Country violates its Free Trade Agreement (FTA). Embargoes, import quotas, exchange restrictions, and buy-national policies are examples of non-tariff obstacles to trade. The elementary argument against the tariffs is that they smother free commerce and also render comparative advantage ineffective. The central motive for tariffs is their ability to help with the protection of domestic businesses, workers, and industries. Additionally, Australia may find producing the imported materials inside and within its domestic country might prove beneficial for the Australian Economy. An embargo is a full prohibition on the export and import of goods. Embargoes are imposed frequently for several defensive reasons. For instance, the US prohibits exporting high-tech products like lasers and supercomputers to unallied nations. Though this embargo charges billions of dollars from American businesses in lost sales every year, it also helps by preventing rivals from adopting the state of the art technologies in their military systems. Hence, Australia might impose restrictions and hike import duties to discourage imports and promote indigenous productions (Ayob, Freixanet & Shahiri, 2022). So, to summarise it all, a Free Trade Agreement (FTA) violation can cause barriers to trade, where trade disputes can act as barriers to trade. Foreign Country sanctions, restrictions and impositions can cause barriers to trade. Flagging of Countries or importers can cause barriers to trade. Breach of legal guidelines can cause trade barriers. International disputes can cause trade barriers. Any government subsidies for particular domestic industries are another existing trade barrier. Subsidised brand certain commodities lower in expense to the manufacture than they typically could be found on any open market. Consecutively, the domestic pricing is cheaper. Subsidies and tariffs both shoot the value of imported products in contrast to domestic items and reduce imports. Blockades to trade are often demarcated as “protection” barriers since their primary declared agenda is to promote or safeguard particular areas or sectors of the economy. However, from the economic point of view, the expenses of barriers to the trade possibilities always supersede the advantages received by entities who are safeguarded.
Following the demise of the Doing Business initiative, the Global Banking Group is developing a novel way to measure the investment and overall business climate in economies throughout the world. As information on the new Business Enabling Environment (BEE) initiative becomes available, it will be posted on this page. In the meanwhile, this site will serve as a one-stop-shop for users interested in enhancing their business environment, highlighting a collection of handpicked indicators and tools. The BEE project’s consultations were just completed. Civil society as well as commercial sector groups, academic experts, think tanks, governments, and international development organizations will provide feedback on their website within a week (The World Bank, 2022). Any government or institutional subsidy to a particular domestic industry is yet again an existing trade barrier. Subsidies mark those commodities to be inexpensive to manufacture than they generally would have been on any open market. Therefore, domestic pricing is cheaper. Subsidies and tariffs both accelerate the fee of imported products in contrast to indigenous items, and decreasing imports. Blockades to trade are considered to be “protection” limitations since their declared goal is to promote or safeguard specific areas or sectors of the economy. Nevertheless, from the economic point of view, the budgets for limiting the trade possibilities almost always surpassing the benefits received by the ones who are safeguarded. The newer proposed system is aimed at improving the technological boundary of the World Bank data archives and providing dynamic data information to the companies at every stage of the business, viz; opening a business, operating a business and closing a business. This can prove beneficial for various organizations to stay updated to the latest international sanctions and information’s and adjusts their organizational dynamics accordingly. However, the shift from the legacy system might cause disruptions for some organizations, while the integration of the legacy and the new business system can cause confusions for the businesses operating in the international market. To avoid such situations, it is imperative that Australia as a Country updates its sanctions and legal requirements based on the newer model in a lucid and simple manner. To summarise it all, the selected Country for the study is Australia. The “Ease of Doing Report” will facilitate the availability of diverse data for businesses and the public. The “Business Enabling Environment” and the “Doing Business Legacy” data will be clubbed together to provide a digital archive of data and knowledge. The shift from the legacy system to a newer system can disrupt the business dynamics considerably. The system and data integration can cause confusion and complexities. Updating the doing a business parameters based on international changes might prove difficult. The World Bank Group’s management decided to stop publishing the Doing Business report in September 2021. The Doing Business website, on the other hand, remains open to the public as a knowledge and data archive. The Doing Business initiative, which began in 2002, provides objective assessments of business regulations and enforcement. The initiative looked at small and medium-sized businesses in the United States and measured the policies that impact them throughout their lives. In 2003, the inaugural Doing Business report comprised five sets of indicators and a total of 133 economies. The final report, which was released in 2019, looked at 11 sets of indicators and oveall 190 economies.
References
Ayob, A. H., Freixanet, J., & Shahiri, H. (2022). Innovation, trade barriers and exports: evidence from manufacturing firms in ASEAN countries. Journal of Asia Business Studies. DOI: https://doi.org/10.1108/JABS-05-2021-0185
Di Mario, L., Rao, K. C., & Drechsel, P. (2018). Enabling environment and financing-Section V (No. 612-2019-923). https://econpapers.repec.org/bookchap/agsiwmibc/284239.htm
Group, D. (2022). Home – Wesfarmers. Retrieved 31 March 2022, from https://www.wesfarmers.com.au/
Gygli, S., Haelg, F., Potrafke, N., & Sturm, J. E. (2018). The KOF globalisation index-revisited. DOI: https://dx.doi.org/10.2139/ssrn.333878/
The World Bank. (2022). Retrieved 31 March 2022, from https://www.worldbank.org/en/programs/business-enabling-environment
Trade and Investment. (2022). Retrieved 31 March 2022, from https://www.dfat.gov.au/trade/trade-and-investment
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