Many politicians cite afford high market value exports to justify free trade agreements. This misses the point of trade. We benefit more when we export the goods and services. That we are most efficient at making, than increasing their absolute value.

International trade success is determine by a firm’s productivity and not its export market value. This is why small and medium-sized Australian businesses have been able to endure and thrive.

These businesses still account for less that 5% of total exports. Smaller businesses were traditionally thought to less productive that larger businesses. But, success in domestic sales can also be a contributing factor to export market success.

Home Is Not Productive Afford

You won’t be able to survive if your home is not productive. Despite their small and medium-sized contribution to total exports, they contribute more than half of the nation’s output.

This large difference is apparent in many sectors. This is evident in the Australian agriculture, forestry, and fishing sectors. About 92% of the sector’s domestic sales are made up of small and medium-sized businesses.

Despite this, small businesses only account for 14% of exports from the sector. There is a significant gap between exports and domestic sales. One must ask what can done to encourage exports by Australia’s small and medium-size businesses.

The concept of comparative advantages is the key to economic success. A business can gain international trade benefits. If it concentrates its efforts on exporting a product or service it produces better than its competitors.

It has proven that government policies that encourage foreign direct investments abroad, the integration of value chains and domestic regulations that support international trade, best suite to accomplish this. Policy makers often forget this because they focus on the big numbers more than the big picture.

The importance of comparative advantages underpins the idea that Australia’s agriculture and forestry sectors are the biggest winners from the revitalized Trans-Pacific Partnership (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership). However, this is not the case for Australian exporters of vegetables and other food products.

Who Benefits From Trade?

If you place the emphasis on the big numbers in the debate about free trade and not on the bigger picture, the debate about free trade focuses on the legitimacy of the economic principle that international commerce can make everyone more prosperous also known by gains from trading.

This assumption is not always true. Special interest groups may sometimes ensure that there will be a surge of protectionist or free market sentiments across policy-making circles.

For the average, hardworking Australian small or medium-sized business owner, who is not involve in special interest politics and does not care about the question of how many exports are eligible for a free trade deal? these are secondary considerations.

Street-smart entrepreneurs know that it is difficult to produce all goods and services efficiently. They are more interested in the international trade that will benefit their business.

The fallout from a trade conflict between our afford major trading partners is of greater concern to Australia’s small- and medium-sized businesses

You are use to being a fighter if you own a small or medium Australian business. It doesn’t matter how much is done to encourage exports. In the current international climate it may be a good idea to keep your business agile and focus on domestic sales.