Destination: Consider the product/service – Are there any non-tariff barriers?
A nontariff barrier is a way to restrict trade using trade barriers in a form other than a tariff. Non-tariff barriers include quotas, embargoes, and levies. According to the textbook, import quotais a direct restriction on the quantity of goods that may be imported into a country. Based on my research, We also find that there are some foods that are embargoed. Embargo is an official ban on trade or other commercial activity with a particular country. For Australia, eggs and egg products, dairy products, uncanned meat, seeds, nuts,and fresh fruit and vegetables are restricted. The issues of import quotas and embargoes don’t have any effect on us because we decide to buy meat from local farmers. We need to export one important food resource, dioscorea alata. It’s known as purple yam, ube, or greater yam, among many other names, is a species of yam. Dioscorea alata is not available in Australia, so we need to import them from asian countries, but it’s good news that dioscorea alata is not the goods that are import quota.For the levies, it’s one of the fees paid to the authority that services your property such as a body corporate or municipality. It is like insurance about the tripping. Overall, we believe that we will have the challenges to face such as keeping the original recipe. We also hope that we do not have any issue of being unable to import some important resources.
(Great analysis. Have similar restaurants as Jollibee been established in Australia before? If so, a lot of the administrative nightmares have been worked-out. If not, your time to revenue may be delayed until all the import permits and local sourcing are agreed upon.—-professor)
Destination: Consider the product/service – Are there any tariff barriers?
According to the textbook, a tariff is defined as “a tax that is levied on imports (or exports).” Tariffs are usually placed on imports in order to protect domestic businesses and products. While tariffs help generate revenue for the government, it is more anti-consumer in that consumers have to spend more for certain imported goods. According to austrade.gov , Australia’s economic ties with the world have been very strong and has allowed it to be a major supplier to the Asia-Pacific region. More specifically in terms of Australia’s and Philippines relations, they adopted the ASEAN Harmonized Trade Nomenclature which promotes uniformity in classification of goods and the facilitation of trade. Therefore, all countries that signed are expected to deliver new opportunities for investors from both Australia and the Philippines, indicating a healthy relationship. While Jollibee will most likely not have to pay any tariffs, due to Jollibee being in the food service, the company will have to obtain specific food licenses from Australia in order to conduct business as well as have proper documentation and classification.
Destination: Does the country offer any Local Content Incentives/Opportunities?
Before looking over opportunities Sydney, Australia has to offer for our company we must understand what local content requirements is and what Australia requires from each industry. Local content requirements are in place to protect domestic businesses and agriculture. One example of a requirement in Australia is food labeling for consumers to be informed of what they are purchasing and consuming. Considering Australia promotes sustainable livingstock and disease-free this is not only a local content incentive, this is a great opportunity for Jollibee to expand on better usage of the meat served. Taking advantage of Australian domestic market, Jollibee can not only attract the new market the company is entering but, also, save on transportation to import their produce. This action may possibly improve the company will have with the country.
(Precisely! Does the local sourcing for beef and chickens become in effect from day-1 or does the Australian government provide a time frame to achieve 100% local sourcing of certain items?—-professor)
How can the WTO help your expansion to the destination chosen? ( question I need to answer)
For the expansion of the Jollibee fast-food chain from the Philippines to Sydney Australia, WTO can help in the trade and development of this chain. According to the textbook, WTO plays a key role in helping countries regulate the major trends of expansion of worldwide value chains, higher prices of supplies, and the rise of the developing world(202～204). It does this by applying, modifying, and operating trade, expansion, and law arrangements between countries, and offers an unbiased medium for expansion discussions between members. Australia is one of the few commodity manufacturers that is not considered to be a developing country. It aims to help with imports, exports, expansion, development, and leading trade honestly
The WTO’s global structure pulls down expansion obstacles through intervention and relates the principle of non-discrimination. The outcome is the low cost of manufacturing as imports used in making material are low-cost. Lower prices of complete goods of fast food, facilities, and eventually a lower cost of living. Therefore, the WTO being significant for worldwide business expansion, and it is essential. This encourages economic development, and this can be good news, as the expansion of Jollibee in Australia will boost the employment level. Most of the world has been set on globalization and, Jollibee should also be on the same pathway to make the most of its profits and deals, and Australia is the perfect target.
(The WTO provides an “insurance” policy. However, the current ASEAN agreements trump the WTO influence.—–Professor)
Conclusion/Recommendations: Based on your research findings, what changes would you recommend to your initially proposed strategy?
The exquisite flavors won’t be the only thing Jollibee brings with its upcoming opening. With Jollibee’s expansion to Australia comes new investment opportunities and increased jobs for the Australian people. Since Australia has kept strong global economic ties, imports and exports alike shouldn’t come with too many barriers. But even so imports and exports won’t be too vast since we plan to shop locally which is good for our company and the country of Australia. This research just reinforces our initial proposal of Australia for our expansion plans.
(How long will it take Jollibee to open the first store? How can this process be accelerated? .—–Professor)