Australia prides itself as a global free trade player, with a total of 11 free trade agreements (FTAs) already in place. These agreements allow Australian businesses to tap into new markets, reduce tariff barriers and maximise opportunities for growth and innovation.
But which of these agreements are the best for Australia? Here, we will discuss the top three Australian FTAs and highlight their significance for the Australian economy.
1. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
The CPTPP is a mega FTA between 11 countries, including Australia, Japan, Canada, and New Zealand. It aims to lower tariffs and other trade barriers, promote economic growth, and strengthen economic ties between the participating countries.
For Australia, the CPTPP is significant as it grants Australian businesses access to key Asian markets, including Japan, which is Australia`s second-largest trading partner. The agreement also provides tariff reductions for Australian agricultural exports, which will benefit farmers across the country.
2. Australia-United States Free Trade Agreement (AUSFTA)
The AUSFTA is an agreement between Australia and the United States that was signed in 2004. It seeks to reduce barriers to trade and investment and promote economic growth between the two countries.
The agreement has proved to be beneficial for Australian exporters, particularly in the agriculture sector, as it has eliminated tariffs on a range of Australian products. The AUSFTA has also helped to increase the flow of foreign investment between the two countries, with the United States being Australia`s largest foreign investor.
3. Australia-China Free Trade Agreement (ChAFTA)
The ChAFTA is an agreement between Australia and China that was signed in 2015. It aims to reduce barriers to trade and investment and promote economic growth between the two countries.
For Australia, the agreement offers significant opportunities for businesses to tap into the expanding Chinese market. The ChAFTA has given Australian exporters tariff reductions on a wide range of goods, including seafood, meats, wine, and dairy products. Meanwhile, Chinese investors have been given greater access to the Australian market, with the agreement increasing investment thresholds for private Chinese investors.
In conclusion, Australia is well-positioned in the global free trade arena, with a range of FTAs already in place. While all of these agreements have their unique benefits for the Australian economy, the CPTPP, AUSFTA, and ChAFTA stand out as the top three agreements that are most significant for Australian businesses. They each offer the potential for greater access to markets, increased investment, and reduced tariffs, helping to drive economic growth and innovation.