Free trade benefits oversold: commission
Sydney Morning Herald, Sydney
Free trade benefits oversold: commission
By Peter Veness
13 December 2010
AAP. The positives of free trade agreements have been oversold and the way the deals are done needs to be improved, the Productivity Commission has found.
"While tariff preferences in trade agreements can benefit some industries, the commission found little evidence that Australia’s recent bilateral agreements had provided substantial commercial benefits," the commission said in a statement on Monday.
"Where there is an interest in pursuing a trade agreement with particular countries, economic assessments should be based on realistic scenarios with any modelling overseen by an independent body."
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The comments come on the release of the commission’s Bilateral and Regional Trade Agreements research report.
Trade Minister Craig Emerson last week promised a major policy re-think on the area.
A key recommendation from the commission’s study calls for government to hold an annual "trade policy review".
While Dr Emerson did not respond directly to the recommendation, he warmly welcomed the research.
"The Productivity Commission’s report will provide valuable input into the review, as will the views of academics, trade unions and business organisations," Dr Emerson said in a statement.
Free trade agreements (FTAs), the study finds, can actually distort the market between Australia and countries not involved in the agreement.
"FTAs involve preferential arrangements under which tariffs and some other barriers to trade are lowered (although not always eliminated), but only for those countries party to the agreement.
"The barriers for other countries are not reduced by the agreement."
The commission has also taken the time to look at so-called "behind the border" issues that can be affected by the deals.
One impact had been unexpectedly felt in the entertainment sector.
"Australian television productions must now be defined as being both Australian and New Zealand programs for the purposes of the Australian Content Standard with which Australia’s free-to-air commercial television broadcasters must comply."
Assistant Treasurer Bill Shorten joined Dr Emerson in welcoming the report.
"The report and the diverse variety of submissions reveal the complexity of the issues and highlight the range of differing views which exist in the community."
