We do nothing to deny third world countries the right to export!
We need to be an economy that still makes things, least we follow Britain, which ditched most of its manufacture, in favor of services, and paid a huge price when the GFC hit!
Besides, sourcing locally, limits the total carbon foot print.
Yes we do import petroleum products!
In fact we import around 91% of our current requirements, and most of that is originally sourced from the M.E.!
And at a cost of at least 26 billions annually, even as we have cleaner green supplies under our virtual feet, which in common usage, create four times less carbon than that we currently import!
Third world countries with their much lower pay rates and virtual slave labor conditions, can export where they like, except those countries, that have imposed a commercial boycott on child or slave labor.
I see nothing wrong in that boycott, and would see it remain, until, decent living wages and more humane conditions become par for the course, in some source countries.
I remember well, the political blurp that accompanied the quite deliberate wind-back of our own homegrown textiles and footwear industries and the loss of around 60,000 jobs.
We were told, sourcing these products offshore, would enable the average consumer, much lower retail prices.
In reality, the only real changes, were engorged middle man profits, and or, additional profits mostly padding already bulging pockets!
One local manufacturer innovated, with CAD and automatized cutting, and a direct sale fully fitted paradigm. That saw the consumers buy direct from the factory, eliminating virtually all the middlemen.
Unfortunately, piece work, and new migrant middle men, and no choice migrant labor, working for far less than the award, and out of their garages etc, killed that innovation!
Just this much rampant exploitation, means we need to keep and empower unions, the only ones that were just decent enough, to stand in the way!
Of course we need free trade and commerce, but only that which is genuinely reciprocal, rather than that, which simply entrenches dehuminising exploitation!
Rhrosty.

Rhosty

Australia’s main indirect tax, the GST, is designed specifically not to cascade in the way you describe. Payroll tax will not cascade, assuming labour costs are similar in distributed and non-distributed industries. Nor will PAYG or PAYE; and anyway, these are effectively withholding taxes on income, not costs of production. Our fuel excises are among the lowest in the world (USA excepted).

There is no evidence I am aware of suggesting that Australia’s car industry is more heavily taxed than other countries’. On balance we are a relatively low-taxed country compared to most developed economies.

Perhaps there really are wonderful technological opportunities there for the taking as you imagine; perhaps these technologies are more difficult and expensive to bring to commercial reality than you envisage. Either way, there is nothing in Australia's or our trading partners’ tariff structures to prevent this from happening

Rhosty, You say: “Third world countries with their much lower pay rates and virtual slave labor conditions, can export where they like, except those countries, that have imposed a commercial boycott on child or slave labor. I see nothing wrong in that boycott, and would see it remain, until, decent living wages and more humane conditions become par for the course, in some source countries.”

Child labour and extreme exploitation are symptoms of acute poverty. The only solution to poverty is development, and trade is a necessary and integral part of development.

When threatened trade boycotts caused Bangladesh to close down child labour in its garment factories, the displaced children went to work in even worse conditions, including in quarries an the sex industry:
http://www.unicef.org/sowc97/

Unless we can offer workers, including child workers, a realistic prospect of better living conditions, I see a great deal wrong in boycotting third world products.
http://www.ingentaconnect.com/content/aea/jep/2005/00000019/00000001/art00011?crawler=true

But Rhian,

You need to take a longer term view. If parents can't profit from renting out their children for child labour, then they will have fewer of them, to the ultimate benefit of the whole society. Enforcing compulsory education would also have benefits where children are being used as unpaid labour on the family farm. Why do you blame us if children end up in quarries or brothels and not the parents of those children or the different layers of government in their countries? Perhaps we could ban goods produced by child labour, but also put more of our foreign aid into programs to provide free meals in schools.

Divergence

I don’t “blame” us if children end up in quarries, but I do point out that our well-meaning actions can have serious unintended consequences, and we have a responsibility to think these through. If you read the article in the second link, it points out that countries where child labour is common are typically extremely poor, without the resources to police child labour laws effectively or to provide free schooling, let alone free meals.

Third world parents who send their kids to work in factories aren’t evil or stupid – they do so because their alternatives are even worse. The evidence is that when living standards start to improve so families can survive without a child’s income, and where school is a real option, parents far prefer to send their kids to school than to work. Just as we do. Incidentally, as countries become richer, their birth rates tend to fall – a rather more humane way of encouraging slower population growth than intensifying poverty, I suggest.

So, it is precisely a long-term view that I am taking. The changes needed to raise very poor countries from poverty take decades. Economic development is the only proven way to provide better alternatives to child labour in the long term, and trade is necessary for economic development.

Unless we provide poor workers with a better alternative – and I mean a real concrete alternative which the individuals affected can access – taking away their jobs will make them worse off. So yes, we can use aid money to compensate families for loss of income and provide schools and meals, but this will not generate the kind of economic transformation that is needed to sustainably give poor families better options.

Rhian,

You are suggesting that the resources exist to make 7 billion people rich without deal-breaking environmental damage and critical resource shortages, let alone the 10-11 billion that are expected under the UN medium projection. I believe that this is a pipe dream. What will make the world's poor better off is to have fewer babies, to support honest and competent leaders who will look after their whole country and not just their own ethnic or religious group, and to change aspects of their culture that have become dysfunctional.

Once having lots of babies doesn't pay, the numbers will come down quickly, as they did in Iran and Thailand (without compulsion, mind you). There is currently a tragedy of the commons situation, where the poor people as a whole would be better off if the population were smaller, but the parents who have lots of children to rent out are still better off than their neighbours with smaller families. See

http://ideas.repec.org/p/wpa/wuwpdc/0507002.html

There are small ways in which we can help, such as with free school meals programs, which benefit the child, but not the parents, and by refusing to buy goods made with child labour, but the main effort has to come from the poor people themselves.