Omari Gates
Australia has a strong history of supporting free trade, with 18 free trade agreements (FTAs) currently in force worldwide, covering 30 economies. Australia was a founding member of the General Agreement on Tariffs and Trade (GATT) in 1947, which aimed to reduce tariffs and other trade barriers. The country has since continued to pursue bilateral and multilateral free trade agreements, including with New Zealand, the United States, the United Arab Emirates, and several countries in the Asia-Pacific region. These FTAs provide a competitive edge for Australian businesses by reducing or eliminating certain barriers to international trade and investment, thereby enhancing the international competitiveness of Australian exports.
| Characteristics | Values |
|---|---|
| Is Australia a free trade country? | Yes, Australia is a free trade country that has signed numerous free trade agreements with other countries and regions. |
| Top free trade agreements | Australia-United States Free Trade Agreement (AUSFTA), Australia-Chile Free Trade Agreement, <co: 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,30,31,32,33,34,35,36,37,38,39,40,41,42,43,44,45,46,47,48,49,50,51,52,53,54,55,56,57,58,59,60,61,62,63,64,65,66,67,68,69,70,71,72,73,74,75,76,77,78,79,80,81,82,83,84,85,86,87,88,89,90,91,92,93,94,95,96,97,98,99,100>Australia-New Zealand Closer Economic Relations Trade Agreement</co: 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,26,27,28,29,30,31,32,33,34,35,36,37,38,39,40,41,42,43,44,45,46,47,48,49,50,51,52,53,54,55,56,57,58,59,60,61,62,63,64,65,66,67,68,69,70,71,72,73,74,75,76,77,78,79,80,81,82, |
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What You'll Learn
Australia's free trade agreements (FTAs)
Australia has 18 free trade agreements currently in force worldwide, covering 30 economies. Free trade agreements (FTAs) are international treaties between two or more economies that reduce or eliminate certain barriers to trade in goods and services, as well as investment. They can cover entire regions with many participants or link just two economies.
Australia was a founding member of the General Agreement on Tariffs and Trade (GATT) in 1947, which aimed to promote international trade by reducing tariffs and other trade barriers. The Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), signed in 1983, was a significant step towards bilateral trade agreements, creating a single economic market between the two nations.
In 2003, Australia signed the Australia-Singapore Free Trade Agreement (ASFTA), followed by agreements with Thailand and the United States (Australia-United States Free Trade Agreement, AUSFTA) in 2005. The ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) came into effect in 2010, expanding trade relations with Southeast Asian countries.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) includes several key economies in the Asia-Pacific region, and Australia became a signatory in 2018. Australia also has a free trade agreement with the European Union, negotiations for which began in 2019 but have been suspended since 2023. Australia is currently negotiating a free trade agreement with the United Arab Emirates, with negotiations set to start in 2024.
FTAs provide a competitive edge for Australian businesses by reducing and removing certain barriers to international trade and investment. This benefits Australian exporters, importers, producers, and investors.
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Benefits of FTAs for Australian businesses
Australia has 18 free trade agreements (FTAs) worldwide, covering 30 economies. The country was a founding member of the General Agreement on Tariffs and Trade (GATT) in 1947, which aimed to promote international trade by reducing tariffs and other trade barriers.
Free trade agreements can cover entire regions with many participants or link just two economies. Under these agreements, parties enter legally binding commitments to open access to each other’s markets for goods, services, and investment.
- Increased international competitiveness of Australian exports: FTAs can enhance the international competitiveness of Australian exports by reducing or eliminating certain barriers to trade in goods and services, as well as investment. This can give Australian businesses a competitive edge in the global market.
- Access to new markets: FTAs provide Australian businesses with access to new markets and opportunities for trade and investment. For example, the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) expanded trade relations with Southeast Asian countries.
- Reduced tariffs and taxes: FTAs aim to reduce or eliminate tariffs, taxes, and other restrictions on trade, making it cheaper and easier for Australian businesses to export their goods and services to other countries.
- Increased trade in services: FTAs help to increase trade in services by eliminating discrimination against service suppliers from member countries. This can benefit Australian businesses that provide services internationally.
- Support and guidance: Organisations like Austrade offer support, guidance, and information to Australian businesses looking to take advantage of FTAs. This includes helping companies familiarise themselves with local market conditions and developing export opportunities.
- Strong legal framework: As a member and strong supporter of the WTO, Australia upholds legal trade disciplines in relation to its FTAs to ensure they are of the highest quality and support the international trading system. This provides a stable and secure environment for Australian businesses to operate in.
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The General Agreement on Tariffs and Trade (GATT)
GATT was expanded and refined over the years, with eight rounds of trade negotiations taking place from April 1947 to December 1993, each with significant achievements and outcomes. In 1963, Ministers agreed on three negotiating objectives for the round: measures for the expansion of trade of developing countries, reduction or elimination of tariffs and other barriers to trade, and measures for market access for agricultural and other primary products. GATT's role in international trade was largely succeeded in 1995 by the World Trade Organization (WTO), which absorbed the organization created to implement GATT. By then, 125 nations were signatories to its agreements, covering about 90% of global trade.
GATT played an important role in shaping international trade and reducing trade barriers. It provided a system for arbitrating commercial disputes among nations and enabled several multilateral negotiations to reduce tariff barriers. The creation of the WTO built upon the foundation laid by GATT, extending and refining the rules and agreements established under GATT to further enhance international trade.
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Regional Comprehensive Economic Partnership Agreement (RCEP)
Australia has 18 free trade agreements currently in force worldwide, covering 30 economies. It was a founding member of the General Agreement on Tariffs and Trade (GATT) in 1947, which aimed to promote international trade by reducing tariffs and other trade barriers.
The Regional Comprehensive Economic Partnership Agreement (RCEP) is a free trade agreement between 15 member countries, signed on 15 November 2020. It came into force on 1 January 2022 for ten countries: Australia, Brunei Darussalam, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand, and Vietnam. It came into force for the Republic of Korea on 1 February 2022, Malaysia on 18 March 2022, Indonesia on 2 January 2023, and the Philippines on 2 June 2023.
The RCEP is significant as it is the first agreement to create a free trade agreement between the large economies of China, South Korea, and Japan. However, it has been noted that it is not as comprehensive as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), another free trade agreement in the region that includes some of the same countries. The RCEP does not establish unified standards on labour and the environment and does not commit countries to open services and other vulnerable areas of their economies.
Despite this, the RCEP is still economically significant, particularly for China, Japan, and Korea. It has been predicted that the RCEP will reorient trade and economic ties away from global linkages toward regionally focused relationships in East Asia. Additionally, the RCEP, together with the CPTPP, is predicted to more than offset the global negative economic effects of the China-United States trade war, although not the individual losses of China and the United States.
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Australia's bilateral and multilateral FTAs
Australia has 18 free trade agreements currently in force worldwide, covering 30 economies. The country was a founding member of the General Agreement on Tariffs and Trade (GATT) in 1947, which aimed to promote international trade by reducing tariffs and other trade barriers. Australia has since pursued both bilateral and multilateral FTAs to open up new markets, reduce trade barriers, and foster economic growth.
Bilateral FTAs are agreements between two countries designed to give each other preferential trade terms, easier market access, and reduced tariff barriers. They are quicker to negotiate than multilateral agreements and can address specific trade issues more effectively. An example of a bilateral FTA is the Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), signed in 1983, which created a single economic market between the two nations. Other bilateral agreements include the Australia-Singapore Free Trade Agreement (ASFTA) in 2003, and agreements with Thailand and the United States (Australia-United States Free Trade Agreement, AUSFTA) in 2005.
Multilateral FTAs, on the other hand, cover entire regions with many participants. Australia has several multilateral FTAs in place, including the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), which came into effect in 2010 and expanded trade relations with Southeast Asian countries. The Regional Comprehensive Economic Partnership Agreement (RCEP) is another example of a multilateral FTA, involving ten countries: Australia, Brunei Darussalam, Cambodia, China, Japan, Laos, New Zealand, Singapore, Thailand, and Vietnam. The RCEP entered into force on 1 January 2022, with the Republic of Korea joining on 1 February 2022, Malaysia on 18 March 2022, Indonesia on 2 January 2023, and the Philippines on 2 June 2023.
Australia is also a signatory to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes several key economies in the Asia-Pacific region. The CPTPP has been ratified by Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. On 1 February 2021, the United Kingdom (UK) formally requested accession to the CPTPP, and on 31 May 2023, the Australia-United Kingdom Free Trade Agreement entered into force.
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Frequently asked questions
An FTA is an international treaty between two or more economies that reduces or eliminates certain barriers to trade in goods and services, as well as investment.
Australia has 18 FTAs currently in force, covering 30 economies.
Australia has FTAs with New Zealand, the United States, the United Arab Emirates, and the European Union. Australia is also a part of the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) and the Regional Comprehensive Economic Partnership Agreement (RCEP).
FTAs provide a competitive edge for Australian businesses by reducing or removing barriers to international trade and investment. They also enhance the international competitiveness of Australian exports and open up new markets for Australian goods and services.
Austrade is an Australian government agency that helps Australian companies familiarise themselves with local market conditions and develop export opportunities. They offer support, guidance, and information for international investors and buyers. You can also use their Tariff Finder Tool to find out what tariffs, taxes, and trade remedies apply to exporting your goods.
