Asia-Pacific trade in the shadow of 'America First'

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Ministers from the Asia-Pacific region met in Hanoi to discuss the changing trade landscape, given the context of Trump’s presidency and his withdrawal from the TPP.

How does this relate to the HSC syllabus?

  • There has been increasing questions on the validity of globalisation and concerns around increasing protectionism.
    • With events, such as the election of Trump and Brexit, the global economy appears to be reversing the globalisation trend in recent times. There are “increasing numbers of people questioning the benefits of globalisation and free trade, spurring protectionist trends".
  • China will be pushing a new free trade agreement called the Regional Comprehensive Economic Partnership (RCEP).
    • The RCEP is a potential multilateral free trade agreement which lowers trade barriers like tariffs and quotas amongst the member countries.
    • Notably, the United States is not part of the discussions. However, there are points of disagreement between countries like China, India, Australia, New Zealand, Japan and South Korea. This reflects the difficulty of establishing a multilateral free trade agreement.

Macronomy: What are Emmanuel Macron's economic plans?

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Emmanuel Macron has won the French election against Marine Le Pen. His key economic policies include reforming the Eurozone, taxation reform, labour market policies and budget consolidation.

How does this relate to the HSC syllabus?

  • Le Pen proposed a referendum for France to leave the EU if she was elected. Macron instead wishes to reform the Eurozone: to develop a common Eurozone budget and have a Eurozone finance minister.
    • One of the problems with the EU is lack of alignment of monetary and fiscal policy. The European Central Bank controls monetary policy throughout Europe, but each country individually controls their own budgets and fiscal policy. This ultimately reduces the effectiveness of these policies in tackling economic issues.
  • Macron wants to gradually reduce corporation tax from 33% to 25%, and introduce a tax on the wealthy.
    • One effect this has is potentially increase business investment. As AD = C + I + G + (X – M), this will increase aggregate demand in the economy, leading to an increase in economic growth. (HSC Topic 3)
    • On the other hand, this could decrease government revenue, meaning they have less to spend on social infrastructure such as roads, health and education. (HSC Topic 3)
    • A tax on the wealthy would naturally decrease wealth inequality. (HSC Topic 3)
  • Macron wants to make it easier for employers to take on new staff.
    • France’s unemployment rate is 10.1% now, with around 3 million people unemployed.
    • Various policies make it difficult for employers to take on new employees, which increases frictional unemployment.
    • Part of the reason for France’s poor performing labour market is the higher wage rate. Because French workers are more ‘expensive’ than workers in other European countries nearby, such as Poland or Portugal, there is a lower incentive to hire them.


Gary Liang is the founder and director of Keystone Education. He attended Sydney Boys High and achieved an ATAR of 99.95 in 2012. He achieved 5 state ranks in Mathematics, Mathematics Ext 1, Mathematics Ext 2, Chemistry and Economics. He is now studying Economics and Science (Advanced Mathematics) at the UNSW Australia, where he is the recipient of six scholarships. He has experience at a top tier investment bank.


Theresa Dang is an economics mentor at Keystone Education. She attended Sydney Girls High and achieved an ATAR of 99.70 in 2012. She is now studying Commerce and Law at the University of Sydney. She has experience in a global technology firm, a mutual fund and a bulge bracket investment bank.