Finally, the negative number for the competitiveness effect indicates the deterioration in the competitiveness of Australia's exports to East Asian countries. While it is possible that this effect may capture some external factors such as US and EU subsidies to farm exports which have depressed Australia's exports, the magnitude of the effect found in this study certainly warrants further consideration. The above results show that Australia should concentrate on improving its export commodity structure and competitiveness if it wants to maintain its share in the East Asian market. Although the unfavourable commodity composition effect would become smaller if we take account of services exports in which Australia appears to have a comparative advantage, Australia should further adjust its economic structure to take advantage of the higher growth of manufacturing imports in the East Asian countries. Export competitiveness is also shown as important.
Competitiveness is influenced by many factors, with domestic ones usually being major determinants.
Further study is called for which could help to identify the influences on competitiveness in the main industry groups. This would help in the development of sensible policy responses for the sake of improving Australia's competitiveness in the fast-growing East Asian market. The Industry Commission, Annual Report 1992-93. Note that the printed version of this paper including four graphs not shown above is available. Details on obtaining a copy.