Free Trade Agreement Utilisation Study

The role of FTAs for Australia’s ongoing prosperity

We asked Australian businesses to tell us their experience on using Australia’s Free Trade Agreements (FTAs), particularly with the three North Asian countries - China, South Korea and Japan. They did this through a series of focus group sessions, one-on-one in-depth interviews and an online business survey.

Australia’s FTAs play an important role as an enabler to Australian businesses.

This study represents the first of its kind in Australia and demonstrates the value the Government places on the impact and utilisation of FTAs, and their influence on trade policy agenda.

Across the many consultations, meetings, focus groups and business survey with more than 530 businesses, it was clear that the FTAs have contributed to Australian business confidence and impacted positively on business activity. They have stimulated export growth and attracted new goods, services and investment to our economy.

At the same time, challenges persist as a result of the complexity of international business, and of FTAs. Whilst progress is being made, businesses asked for more to be done.

Trade has always been, and will continue to be, vital to Australia's ongoing prosperity. The findings identified a correlation between a strengthening trade relationship and FTA usage. Most important of all, it showed that the potential benefits presented by Australia’s FTAs are flowing through to business and, by extension, the broader community.

 

Principal findings

Australia’s North Asian FTAs have high utilisation rates for merchandise trade.

Internationally-engaged Australian businesses are aware of the North Asian FTAs and view them favourably. Understandably, appreciation of the detailed requirements of FTAs, along with their applicability based on industry or product and the process for obtaining FTA preference, varied among businesses, especially at the Small Medium Enterprise level. 

FTAs are influencing business activity, confidence, strategy, expansion planning and international investment, including in the services sector. However, they are not viewed as a silver bullet by industry, but are regarded as complementary to business strategy.

While FTAs provide greater regulatory certainty for Australian service providers and investors in partner markets, these commitments to liberalise services are still new territory for businesses. The full services market access outcomes of Australia’s North Asian FTAs will take time to bear fruit, and will become evident over future years.

Options to optimise business utilisation of FTAs include streamlining origin documentation arrangements, reducing compliance costs, digitising forms, providing further education and advocacy (particularly for Small Medium Enterprises), and implementing measures to foster improved understanding of services and investment commitments in FTAs. Existing review mechanisms in FTAs could help to enhance and align their benefits.

Along with the Australian Government, industry associations and business groups play an important role in assisting businesses understand and utilise Australia’s FTAs. Trade intermediaries also have an important role in assisting businesses to utilise FTAs effectively.

Contact us

Stephanie Males
Partner, PwC Australia
Tel: +61 (2) 6271 3414
Email

Gary Dutton
Partner, PwC Australia
Tel: +61 7 3257 8783
Email

Jeremy Thorpe
Chief Economist & Partner, PwC Australia
Tel: +61 (2) 8266 4611
Email

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