The fact free debate on trade deals
Recent Australian Free Trade Agreements (FTAs) over promise and under deliver.
Analysis by The Australia Institute of FTAs past and proposed reveals that claims of job creation and economic growth contradict available data.
On Monday the Senate will debate the China-Australia Free Trade Agreement (ChAFTA). On Friday last week the text of the Trans Pacific Partnership was released.
“The oft touted benefits of free trade, which derive from economic theory, are generally not achieved by our FTAs,” Senior Economist at The Australia Institute, Matt Grudnoff said.
“This is largely because, despite the name, FTAs do not actually facilitate the ‘free trade’ that economists envisage.
“The current round of FTAs, including TPP and ChAFTA have very little to do with free trade and are more about locking Australia into agreements on regulatory structures.
“Claims that these agreements will bring major economic benefit are contradicted by both government-commissioned analysis and experience with the US agreement.”
Trade Minister Andrew Robb has claimed that FTAs with China, Japan and South Korea represent:
“[A] landmark set of agreements [that] will see literally billions of dollars, thousands, many hundreds of thousands of jobs and will underpin a lot of our prosperity in the years ahead.”
But modelling commissioned by the Department of Foreign Affairs and Trade (DFAT) contradicts such claims. DFAT’s analysis estimates these agreements will:
- Increase GDP by 0.05 per cent in 2035, or an additional $780 million per year in today’s dollars.
- Increase employment in 2035 by just 5,434 jobs.
- Increase the value of Australia’s trade by about three per cent:
- Increase imports by 2.5 per cent.
- Increase exports by 0.5 per cent.
“It’s concerning that the Minister of Trade, Andrew Robb, is making public statements which totally contradict all of the evidence, including the modelling from his own department.
“The assumption that these agreements promote jobs and growth has been stated often, without any concern for the facts, and the public debate has suffered for it,” Grudnoff said.