What is a free trade agreement?
It is an agreement that assists to eliminate or reduce barriers to trade and investment on imported and exported goods between agreed parties.
They can be bilateral agreements, between two parties, two economies, and also regional agreements, between more than 2 parties.
What do free trade agreements mean in practical terms?
- They provide sales and growth opportunities.
- Reduce or eliminate other countries tariffs or taxes at the border.
- Make export and import trade more attractive between agreed parties.
- Provide greater access to competitively priced products and free up investment funds for re-investment back in the Business.
- Make services trade more predictable.
- Help businesses source these more competitively priced products.
Australia and FTA’s in a nutshell
Australia is part of 13 FTA’s with 20 partners across these agreements. Most are bilateral agreements, with 2 regional agreements.
Free Trade Agreements also help facilitate investment in Australia. They are giving Australian exporters a competitive edge in overseas markets in competitive economies. As an example, 27% of Australia’s total trade was with FTA partners back in 2013, it is currently about 70% of trade.
FTA’s can make a significant difference, especially in price.
An example of the reach of regional trade agreements, such as CPTPP, this has 10 other countries as participants, and a number of signatories, looking at becoming participants.
More information
If you are looking to import or export, contact us and we can help assist you with more information on free trade agreements between parties and regions.
Else you can find some important information at: https://www.dfat.gov.au/trade/agreements/trade-agreements
