Thirty years of trade liberalisation have given Australians higher incomes and more job opportunities, according to a research report out today.
The Centre for International Economics (CIE) report provides convincing evidence about the benefits delivered by trade liberalisation in the period 1986 to 2016.
The report found average household income was $8448 higher in 2016 than it would have been without trade liberalisation. One-fifth of the workforce – 2.2 million Australians – worked in trade-related activities in 2013-14, 1.6 million in export-related and 671,000 in import-related areas.
Real GDP was 5.4 per cent higher in 2016 than it would have been without trade liberalisation, investment 11.7 per cent higher, real wages 7.4 per cent higher and prices 3.4 per cent lower.
The report underscores the importance of Australia's long-term commitment to free trade. The Government maintains this commitment by supporting a strong and predictable multilateral trading system and pursuing high-quality free trade agreements.
Any move back to high tariffs and trade barriers would see job losses, cuts in household consumption and falling living standards, according to the report.
Since the CIE's modelling excludes services and investment, and all liberalisation by trading partners, its estimates of the benefits of trade liberalisation are conservative.
The report, Australian Trade Liberalisation: Analysis of the Economic Impacts, was commissioned by DFAT and updates the 2009 CIE report, Benefits of Trade and Trade Liberalisation.