The Australia-China Free Trade Agreement: Do Benefits Exists?

Abstract

Australia and China agreed to launch negotiations on a free trade agreement (FTA) between the two countries in April 2002. Since then, there have been four rounds of negotiations to exchange information covering each country's trade and investment regimes and to examine areas of mutual interest to both countries in the proposed Australia-China FTA. The latest of these meetings was held in Canberra early March 2006 (DFAT, 2006). China is the world's fastest growing major economy with a population over 1.3 billion and a workforce of about 700 million people. The integration of China into the world economy is bound to have a significant impact irrespective of whether Chinanegotiates FTAs with individual trading partners, regions or group of countries or not. China's exports grew from US$ 62.1 billion in 1990 to US$ 266.2 billion in 2001 while imports increased from US$ 53.3 billion to US$ 243.6 billion during the same period. As the Australian Trade Minister Mark Vaile put it "Whether you are a farmer battling against the forces of nature to get your livestock or grain to market, a worker on the factory line or an engineer designing a bridge, you will be affected by the rise and rise of China. I want to make sure Australians benefit from the Chinese boom" (DEFAT, 2006).