Trading Up
Few countries, if any, could match the pace, scale and scope of Australia’s growth in free trade deals, bringing greater opportunities to its businesses and people. By Tim James.
One of the quiet achievements of Coalition Government since 2013 has been the remarkable growth in bilateral trade agreements. When the Government came to office just 26 per cent of Australia’s two-way trade was covered by free trade agreements (FTAs). Now, and after the FTA with Indonesia this week, that figure is 70%. The upside and opportunity for Australian businesses, jobs and communities is enormous.
Since coming to government these FTAs have been concluded and are in force: Korea, Japan, China, the Trans-Pacific Partnership, Hong Kong, Peru and now the forthcoming Indonesia-Australia Comprehensive Economic Partnership Agreement. There’s also an FTA between Australia and eight Pacific Island countries, known as PACER Plus, which has been concluded but is not yet in force. The big three among all these (Korea, Japan and China) were among the most significant achievements of the Abbott Government and have driven major strides forward in Australian trade and commerce.
As global multilateral trade talks have stalled with so little salvaged from the WTO and its Doha round of meetings in the past two decades, Australia has more than made up for it in bilateral agreements. Few countries, if any, could match the pace, scale and scope of Australia’s growth in free trade deals, bringing greater opportunities to its businesses and people. This island nation has got on the front foot and courageously sought co-operation and constructive trade engagement with our key trading partners.
These agreements overwhelmingly set Australia up for success through lowering costs and barriers to trade, lifting opportunities and access to markets, diversifying markets and targets for Australian businesses and liberalising the movement of people and goods. For the Coalition Government to almost treble these opportunities in less than six and a half years is a stunning but often overlooked achievement.
Much credit for this must go to Trade Ministers Andrew Robb, Steve Ciobo and Simon Birmingham and the many DFAT colleagues and teams involved. While trade is often above party politics, it is worth noting that during the Rudd-Gillard years there were three FTAs entered into (Chile, ASEAN-NZ and Malaysia) versus the now eight entered into under this Coalition Government (in a similar timeframe).
Protectionism is becoming a concern in world trade. Australia can and should continue to lead the way with free trade agreements. Looking ahead, there are strong FTA prospects and opportunities with the UK in the post-Brexit era, India and the Gulf Cooperation Council.
This week’s agreement with Indonesia is particularly timely and significant for a number of reasons. This is only the second bilateral trade agreement that Indonesia has with a G20 nation. Indonesia is a land of opportunity for Australia: 265 million people; a median age of 28 years; and rapid growth that will elevate it to the fourth largest economy in the world by 2030, according to some economists. That Indonesian President Joko Widodo described Australia this week in his speech to the Australian Parliament as “Indonesia’s closest friend” is incredibly significant and encouraging. This deal coming at a time when doubts and concerns about China trade and the US-China trade war is very helpful timing to bolster and diversify Australia’s trade conditions.
While free trade agreements tend not to figure prominently in media and political commentary, nor necessarily the voting intentions of people across the country, Australia has led the way in free trade and is reaping the rewards. It’s a strong example of the government of the quiet Australians working to almost treble the trade covered by FTAs. It’s a quiet Australian story of hard work, persistence and success by the Coalition Government.