Australian proposed Free Trade Agreements with China and Indonesia Australia currently participates in seven Free Trade Agreements with New Zealand, Singapore, Thailand, The United states, Chile, The Association of South East Asian Nations (ASEAN) and Malaysia. A Free Trade Agreement (FTA) by definition is the buying and selling, importing and exporting of goods and services, not capital or labour, between two or more countries that has no limits, quotas, barriers or unbalanced tariffs (thelawdictionary, 2014). Australia’s current Free Trade Agreements have greatly benefited Australia with the US investing over 4.18 billion dollars into Australia’s economy in 2008 (Tim Wilson, 2010). By developing a Free Trade Agreement with China over Indonesia, Australia’s industries and investment will continue to grow leading to further economic growth and development for the country. Free Trade agreements can provide many benefits for a country; …show more content…
Australia will have to offer China the same $1.078 billion foreign investment screening along with a $15 million threshold for investment in agricultural land and $53 million for agribusiness (David Crowe, 2014). However Australia’s dairy industry is the fastest growing in China (figure 4) so this cost can be seen as a necessary expense. Indonesia on the other hand relies heavily on Australia for trade, more so than Australia relies on them; because of this and the small size of Indonesia in comparison to global production giants such as China and Japan, the same prices that were needed to secure an FTA with these countries will not be as costly for an FTA with Indonesia. Due to this An FTA with Indonesia could be more cost effective than one with China, however there is limited growth potential in comparison to that of an agreement with