It is believed that it would be highly beneficial for the Australian Government to sign a Free Trade Agreement (FTA) with China. The negotiation of an FTA is a potential win-win situation for both Australia and China. Australia and China share a strong and rapidly mounting economic and trade relationship [1] which can only be enhanced by a deal being struck to create an unimpeded exchange of goods and services. There are a number of claimed benefits that could be potentially lucrative for both countries. However, despite the benefits there are also arguments that develop concerns over the viability of FTA's. Due to the political and cultural differences between the two countries, negotiations may be complex but the economic rewards have the potential to be abundant.
[...] The Australia-United States Free Trade Agreement (AUSFTA) entered into force on the 1st of January 2005. AUSFTA is an inclusive agreement that concerns the trade of goods, services, investment and the environment. The Australian-Chile FTA entered into force on the 6th March 2009 and involved the significant market breach agreement which will result in the immediate decrease of tariffs on 97% of goods traded between the countries. China's economy is expanding at a substantial rate. the last 30 years the rate of Chinese economic growth has been almost miraculous, averaging growth in Gross Domestic Product (GDP) per annum.” (Graph China has the 3rd highest GDP in the world with $ 8.748 trillion. [...]
[...] Heather Ridout is the Chief Executive of the Australian Industry Group and describes the problem as “Australian companies will be reluctant to invest in China is their innovations are likely to be stolen, while manufacturers here risk being undermined by a flood of cheap pirate imports.” The working conditions of Chinese workers have become a concern for the Australian Council of Trade Unions (ACTU). They believe that because Chinse workers don't have access to a Trade union then they are receiving inferior wages to what they deserve. [...]
[...] (Graph Graph Countries total merchandise trade with Australia in 2009 Graph Australia's trade with China between 2000-2005 24 October 2003, the Australia-China Trade and Economic Framework was signed in the presence of the Australian Prime Minister John Howard and Chinese President Hu Jintao.” The Economic Framework devises a plan for the economic relationship between the two countries as well as opening up the possibility of plans for a FTA. There have also been 14 rounds of negotiations for a FTA between the two countries spanning from 26th of May and 6th of July There are a variety of claimed benefits to the Australian economy from signing a FTA with China. [...]
[...] The proposed FTA with China is potentially lucrative with Australian exporters set to take advantage of the potential benefits. Benefits of the FTA include lowering of Chinese tariff barriers creating greater competitiveness for Australian exporters in Chinese market and greater variety of goods for Australian consumers, to provide a net welfare gain for both countries and decrease Australia's unemployment by creating more jobs in the export industry. However, despite these benefits there are concerns over the success of the FTA. [...]
[...] Many Australian businesses and exporters say that the biggest concern facing the proposed FTA with China is the lack of transparency and predictability. Australian exporters claim that it is difficult to find information on the relevant regulations that administer the Chinese market. This can be inconvenient as these regulations need to be complied with for trade to occur. Similarly, it can be tough for Australian companies to gain data such as geographical information that is important for establishing overseas investment. [...]
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