Australia’s Trade Policy Dilemmas – Summary

This Reading talks about how Australia’s trade policy has faced some problems and
dilemmas to achieve its aim of including Australia into an active participation in
foreign affairs. Since the Second World War, australian conservative governments
had inclined to subserve bilateral approaches to trade policy in the way to keep a
friendly relation with others and benefit Australia’s interests. Whereas that labor
governments had tried to hold multilateral trade system up arguing that this method
provided the best changes to achieve Australia’s economic interests.

According to labor’s opinion, Australia does not have enough size, influence and
power to guarantee its association with major trading partners for the purpose of
being able to negotiate “defensive” PTAs to allow to Australia to strike a balance with
its trade partners. However, in terms of offensive interests that could secure market
access of exports, Labor’s view argued that Australia’s interests would be more
favored through multilateral trade negotiations where the stakes are higher,
significant trade-offs are possible, and comprehensive bargaining across many
sectors and between many different players would mean that much better outcomes
would be possible.

Nevertheless, those possible arguments Australia’s active PTA agenda presented

trade policy-markers and negotiators with some difficulties like: the opening of the
Australian economy as a result of unilateral liberalization and the lacking of
negotiating coin. Morever, Australia’s trade policy markers needed to hold back on
some occasions their already limited negotiating coin due to the multiplicity of PTA
negotiations that it was engaged in. An example is that Australia held back
negotiating coin from the ASEAN negotiations for the purpose of securing bilateral
deals with individual ASEAN members, most notably Malaysia instead of negotiating
with all ASEAN members that could lay Australia in disadvantage.

Currently, ten years after of those challenging situations Australia’s trade policy has
changed. Australia has accomplished to push ahead with trade liberalization
(unilaterally, bilaterally and multilaterally). This has managed Australia enhances its
strengthen international economic collaboration and reduces the risks facing the
global economy. Besides that, Australia has played an active role in the WTO,
APEC, the G20 and other trade related fórums and also it has negotiated bilateral
and regional trade agreements with a wide range of countries to strengthen trade
and investment flows. However, Australia has increased its participation in FTAs
instead of PTAs. At this time, Australia has FTAs with sixteen countries through ten
regional and bilateral agreements. FTAs have helped Australia to expand its
businesses internationally.

Since the World Trade Organization Agreement on Trade Facilitation entered into
force on 22 February 2017, Australian businesses, exporting goods may become
more streamlined, take less time to be cleared by Customs at foreign ports, and
could result in lower costs in many markets. Based on the previous information, at
this time Australia has placed as an active actor in bilateral and multilateral trades
and according to that, in my opinion the nearest scenarios to reality are: two and
three.

On the one hand, the second scenario talks about how PTAs can be used as tools
of foreign policy and although it mostly means that a positive aspect for a country, it
can also lead to the imposition on the less powerful partner of economic and trade
measures. Furthermore, PTAs’ proliferation with foreign policy and strategic
objectives could also run the risk of causing adverse political reactions, exacerbating
existing tensions, and being potentially destabilising to international and regional
relations. On the other hand, the third scenario explains how Australia could increase
its participation in multilateral PTAs and nowadays it has become reality due to
Australia has advanced in the WTO’s meetings and now Australia has reached to
streghthen links with other countries and also it has involved in APEC’s initiatives to
‘multilateralise’ PTAs.
Bibliographic references:

 Department of Foreign Affairs and Trade. (2017). Trade and Investment at a

glance 2017. Retrieved from: http://dfat.gov.au/about-us/publications/trade-
investment/trade-at-a-glance/trade-investment-at-a-glance-
2017/Documents/trade-investment-at-a-glance-2017.pdf
 Department of Foreign Affairs and Trade. Australia and the world. Retrieved
from: http://dfat.gov.au/about-australia/australia-world/Pages/trade.aspx
 IntegrationPoint. (2014). From PTA to FTA: What’s the difference?
Retrieved from: https://www.integrationpoint.com/blogs/en-us/24-free-trade-
agreements/1195-from-whats-difference.html
 Reyna de León, A & Cuevas, V. (2017). Lengua Extranjera: Inglés.
Monterrey, NL.