Authors: Malcolm Bosworth and Greg Cutbush, ANU Enterprise

Like all good fairytales, APEC was formed ‘once upon a time’ to promote trade and investment in the Asia Pacific.

Members like Australia, New Zealand and Japan fought hard to ensure it would not become a myopic trade bloc that discriminated against and sought to divert economic activity away from others. Read more…

Authors: Malcolm Bosworth and Greg Cutbush, ANU Enterprise

Australian Prime Minister Julia Gillard and her Government’s ‘Trading Our Way to Prosperity’ statement (in response to the Productivity Commission’s Report on Bilateral and Regional Trade Arrangements) is commendable.

It rejected Australia’s regrettable preoccupation with preferential trade agreements (PTAs), and heeded the Productivity Commission’s advice that trade policy should be reviewed against the ‘principles of unilateralism, non-discrimination, transparency’, and ‘the grand unifying principle of trade policy as an indivisible part of overall economic reform’. Read more…

Author: Malcolm Bosworth, ANU Enterprise

Over the past decade, Australia has jettisoned its successful reform approach of unilateral liberalisation supported by multilateralism. Both sides of politics have instead embraced so-called ’free’ trade agreements (FTAs), motivated mainly by political considerations. The economic cost to Australia, and globally, of FTAs is high. They discriminate among trading partners, provide a veil for protection of inefficient industries, make trade regimes more complex and burdensome on business, and reduce transparency. They also detract from unilateral non-discriminatory liberalisation. Australia has made few major unilateral trade reforms in the past decade (e.g. failure to fix our protectionist quarantine system as typified by the current apple dispute with New Zealand) and it is no coincidence that we have fallen well behind average OECD productivity growth.

Trade Minister Craig Emerson recently indicated he would take a more orthodox economic position in pushing for free trade. Read more…