About free trade agreements

Across the globe, there is an expanding network of free trade agreements (FTAs). High-quality, comprehensive free trade agreements can play an important role in supporting global trade liberalisation and are explicitly allowed for under the World Trade Organization (WTO) rules. An FTA is an international treaty which removes barriers to trade and facilitates stronger trade and commercial ties, contributing to increased economic integration between participating countries. FTAs can cover entire regions with multiple participants or link just two economies.

 

FTAs open up opportunities for Australian exporters and investors to expand their businesses into key overseas markets. FTAs can improve market access across all areas of trade — goods, services and investment — and help to maintain and stimulate the competitiveness of Australian firms. This benefits Australian consumers through access to an increased range of better value goods and services.

 

Australia’s FTA negotiations are increasingly focused on the so-called 'behind the border' issues. A range of factors such as standards, professional qualifications, intellectual property rights and competition policies in trading partner countries may impact heavily on Australian companies exporting to those markets. Such barriers are often more of a problem for businesses than ‘border measures’ such as tariffs and quota restrictions which have been the focus of trade negotiations traditionally but which have become relatively less important over time as average tariff levels have fallen.

FTAs and the World Trade Organization

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. The Australian Government considers these standards as essential to all potential FTA participants and will not enter into trade agreements that fall short of the benchmarks set by the WTO or the benchmarks we set ourselves. Under WTO rules FTAs must:

  • eliminate tariffs and other restrictions on 'substantially all the trade' in goods between its member countries, and
  • eliminate substantially all discrimination against service suppliers from member countries (helping to increase trade in services).

This ensures Australia's FTA are comprehensive in their scope and result in the best possible outcomes for Australia.

Front view of Australia's Parliament building
Parliament of Australia in Canberra.

Australia’s FTAs

Australia has ten FTAs currently in force with New Zealand, Singapore, Thailand, US, Chile, the Association of South East Asian Nations (ASEAN) (with New Zealand), Malaysia, Korea, Japan and China. The countries covered by these FTAs account for 67 per cent of Australia's total trade.


Last Updated: 21 November 2014