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Agenda for Change: Making the Most of Australia’s Free Trade Agreements


As each federal election approaches, ASPI examines the major challenges facing Australia and what is needed to address them. Agenda for change 2022: shaping a different future for our nation, published on February 2, aims to promote public debate and understanding on issues of strategic importance to Australia. The report’s key message is that we need to embrace uncertainty, tackle complexity and break down silos. Our economic prosperity, our national resilience and our security depend on it.

The creatively titled chapter by ASPI Principal Investigator David Uren in 2022 Change Agenda“Free Trade Partners: Where the hell are you?” highlights Australia’s need to make the most of its free trade agreements.

Over the past 10 years, Uren says, Australia has focused its trade attention on China in a “one-horse race”, and it’s time for the government to introduce “some competition by working with our wider network of free trade and security partners”.

Uren points out that our cumulative trade with China over the past decade has increased by 150%, compared to a “paltry” increase of 23% elsewhere. He says the story is similar on the import side: “Sales from China to Australia are up 110%,” while the rest of our purchases are up just 14%.

These results stand in stark contrast to “the huge expansion of Australia’s network of bilateral and regional preferential trade agreements” over the past decade.

Australia’s share of trade with its main trading partner is high compared to other comparable economies, but not exceptionally. What is unique for Australia is that the government of its largest market has ordered punitive trade measures in an attempt to force changes in Australian government policy.

During the Covid-19 pandemic, Australia experienced firsthand the uncertainty and fragility created by the fracturing of our supply chains as we found ourselves at the end of the trade queue while that our trading partners prioritized their trade agreements.

Uren reminds us that “Economics 101 teaches that the purpose of an economy is to improve consumer welfare or raise the standard of living. Exports are not an end in themselves but a means of financing imports.

He also notes: “China is not buying goods that Australia was selling to the United States because they are cheaper or better value, but because the Chinese government has banned purchases in Australia and that the US government has demanded Chinese purchases from the US It is a world of controlled trade that can only hurt the interests of a medium-sized economy like Australia.

Australia’s standard approach to boosting trade is to organize trade missions and delegations where relevant ministers and business leaders travel overseas to encourage other countries to buy our products. Uren says the focus should be on our bilateral trading partners and we should meet them here.

He also suggests that Austrade’s mandate be broadened to include ‘the promotion of Australia as an import destination, as well as just supporting exports’. The legislation establishing Austrade does not refer to imports, so expanding Austrade’s role would require amendments to the relevant legislation.

The Australian government’s significant effort to develop bilateral trade agreements with India and the UK is acknowledged by Uren, but he says more is needed. “Australia should do more to integrate its security and economic policy” and we should leverage more of the Quad and AUKUS partnerships.

Uren suggests that ASEAN trading partners, including Thailand, Malaysia and Indonesia, offer a new opportunity to improve and diversify trade. The catch is that ‘success will likely hinge on Australia accepting limited breakthroughs for our agricultural exports’.

He notes that the use of a bilateral agreement by the United States “to take over the export markets of a key ally is an example of what happens when the world’s most powerful nations move away. World Trade Organization trade rules” and “manage their trade through the exercise of their power”. In response, the Australian Prime Minister must conduct “coordinated trade diplomacy” with our security partners.

Uren’s conclusion is that Australia must “defend the governance of global trade under agreed rules and highlight the damage done when big nations dictate their own terms of trade”.