Background Paper: Free Trade Agreements as Living Agreements

Australia’s Free Trade Agreements (FTAs) are not static; they are implemented over time and subject to regular review to maximise the benefits they deliver.

Existing FTAs are further developed through a range of mechanisms, including the operation of committees and working groups established by the agreements, and review provisions. Collectively, this forms the “built-in agenda” to an agreement.

The built-in agenda provides a platform for the parties to an FTA to deepen commitments at a later stage, perhaps when domestic economic reforms allow, and to further cut red tape for business. In addition, some benefits deepen over time according to the terms of the agreement, such as tariff reduction and elimination schedules.

The China-Australia FTA includes a commitment to review the Agreement within three years with a view to deepening liberalisation and expanding market access. There is also an undertaking for further reviews at least every five years. The FTA includes a commitment to negotiate a comprehensive Investment Chapter.

Examples of the built-in agenda of FTAs

Australia-New Zealand Closer Economic Relations Agreement (ANZCERTA) – in force since 1983

ANZCERTA demonstrates the evolution of an FTA over more than 30 years to achieve deeper economic integration. The Agreement laid the foundation for a wide range of other agreements that have contributed to economic integration, including the Trans-Tasman Mutual Recognition Arrangement (TTMRA) and the Single Economic Market (SEM) initiative.

ASEAN-Australia-NZ FTA (AANZFTA) – in force since 2010

Under AANZFTA’s built-in agenda:

A new protocol, signed in August 2014, provides for improved administrative efficiency by customs authorities, encouraging better FTA utilisation.

A general review will be undertaken in 2016 and every five years thereafter, unless otherwise agreed; and an Economic Cooperation Support Program [PDF] builds capacity and assists in the full implementation of the FTA.

Last Updated: 20 November 2014