Introduction:
In recent past you could read over and over again in the newspapers, that the government around Tony Abbott doesn’t make enough for the economic relations and in particular he doesn´t speeds up the free trade agreement between China and Australia. By the increasing globalisation which results from the „merging of historically distinct and separate national markets into one huge global market", the significance of free trade agreements is getting more and more important between the countries to remain competitive and to participate in the progress. (textbook S.12). Given that China is Australia´s most important trading partner, this assignment picks out as a central theme “The economic impacts of an Free Trade Agreement between Australia and China and shows in particular the effects for the domestic industry and for the international industry.
What is a Free Trade Agreement (FTA)?
Free Trade means „the absence of barriers to the free flow of goods and services between countries“. (Textbook S.76). Another definition says that “Free Trade refers to a situation in which a government does not attempt to restrict what its firms and citizens can buy from or sell to another country”. (Textbook S.119). A Free Trade Agreement is consequently a contract which is concluded between two or several countries to establish a free trade area in which trade in goods and services can be conducted across their borders, without tariffs or obstacles (e.g. ban on imports/exports).
Previous bilateral economic relationship and agreements between Australia and China:
The basis for the bilateral trade and economic relationship was the signing of the “1973 Trade Agreement between the Government of Australia and the Government of the People’s Republic of China”. (feasibility_full.pdf Seite 1). Over the years further bilateral agreements were concluded to make easier mutual