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Report:
This report by Monash University's APEC Study Centre finds Australia
could reap wide-ranging benefits from a Free Trade Agreement (FTA) with
the United States.
It argues that Australian business would not only gain from improved
access to the world's largest economy. There would also be a number of important flow-on effects, particularly in attracting
US investment to Australia and expanding linkages with the dynamic US new
economy and leading edge US business practice.
The study also agrees with the importance of a WTO round launch
as the Government's number one trade priority. The report finds that a bilateral FTA with the US could complement that objective
as well as Australia's regional engagement in Asia and the APEC forum in
particular.
The APEC Study Centre report follows an economic modelling study
by the Centre for International Economics released in June which showed
that an Australia-US FTA could deliver significant increases in GDP and
economic welfare.
Download the Report
Cover
1">Chapter
1 Introduction (131KB)
Chapter 2 Australia/United
States trade and investment (145KB)
Chapter 3 FTAs
- Advantages and disadvantages (126KB)
Chapter 4 What
would an FTA between the Australia and the US cover? (178KB)
Chapter 5 The
economic impact (150KB)
Chapter 6 Best
practice in the global economy (143KB)
Chapter 7 The
bilateral relationship and an FTA (113KB)
Chapter 8 Implications
for Australia's global trade interests (123KB)
Chapter 9 The
regional dimension (131KB)
Prelims Table
of contents, Foreword, Executive summary
Annex 1
Annex 2
Annex 3
Annex 4
Annex 5
Annex 6
Annex 7
GlossaryReport in full (776 KB)
Foreward
The Australian APEC Study Centre, based at Monash University, was
commissioned by the Department of Foreign Affairs and Trade to prepare an
analysis of the impact on Australia of negotiation of a free trade agreement
between Australia and the United States.
Mindful that free trade agreements perform a larger role in today's
globalised world than simple removal of trade barriers – they are instruments
to promote closer relations between economies – this study was conceived
from the outset to assess the impact of an agreement between Australia and
the US for its wider implications.
Consider the case of investment. In the past, free trade agreements
did not cover investment. However so much production today is global that
in many industries the capacity to invest has become as important as a capacity
to trade for companies in international business.
This is highly relevant to the economic importance of the United States
to Australia. It is Australia's second largest trading partner (just shaded
in 2000 by Japan) but it is by far Australia's largest source of foreign
investment. It is without question Australia's most important economic partner.
Trade agreements necessarily are instruments which shape relations
among countries in the long term. Commitments to make changes are usually
secured through a series of incremental steps staged over time to give business
and the community time to adjust to change. So a long-term view of interests
is necessary. It is never easy to predict the future but it is even more
difficult to do so today.
The global economy is in a process of dramatic change. We talk regularly
about globalisation and focus on the negatives as well as the positives.
However the greatest agent for change in the global economy and global society
is information technology.
We have entered the Information Age but the pace of change is so great
that all we know with certainty is that the full impact of information technology
will be greater and different to what we expect.
A final point to make about wider implications stems from an old truism
about trade: businesses trade, not governments. Evidently one of the key
impacts of closer economic relations with the US will be on the Australian
business community. It has become apparent in recent years that Australian
business and management culture is increasingly influenced by US mores.
With the foregoing in mind, the Australian APEC Study Centre assembled
a team with multidisciplinary expertise to prepare this report. As well as
reviewing the traditional impacts on trade between the two countries and
of the strategic importance to Australia's wider foreign and trade relations,
the report aims to address the impact on Australia's investment interests,
the impact on Australia's capacity to succeed in the Information Age and
the impact on business and management culture in Australia.
The research group was Alan Oxley, Chairman of the APEC Study Centre
and Director of International Trade Strategies, Dr Alan Moran of the Institute
of Public Affairs, Patrick Xavier of the Swinburne University and Consultant
to the OECD on Information and Communications Technology, David Uren, Director
of themanager.com.au and Editor of Asia Inc magazine and Kristen Osborne, a consultant with International Trade Strategies.
The group received considerable assistance from the Department of
Foreign Affairs and Trade, in particular Dr Ashton Calvert, David Spencer,
Bruce Gosper, Tim Yeend, Jon Richardson and Rajan Venkataraman. Susan Begley
also advised on trade statistics and provided updates on previous DFAT analysis.
The APEC Centre also held a conference in Canberra on 21 June which
was well attended by the business community. It received financial support
from a number of businesses as well as the Department of Foreign Affairs
and Trade, which met the costs of attendance by some American experts. A
number of valuable papers were prepared and a number of issues considered
in depth. The Centre also consulted on 22 June in Canberra with business
groups on attitudes to an FTA. These activities have assisted greatly with
the preparation of the analysis.
The common view of participants at the conclusion of the June conference
was that a Free Trade Agreement is more important to Australia than had previously
been considered. The research group reached the same conclusion as it worked
on this report.
Alan Oxley
Australian APEC Study Centre
August 2001
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