The economic impact of the Australia-US free trade agreement

    Research output: Contribution to journalArticle

    Abstract

    The Australia-United States Free Trade Agreement (AUSFTA) came into effect in 2005. It was the second preferential trade agreement that Australia signed, after its agreement with Singapore, and marked a departure from the primacy of Australia's previous trade policy of unilateral and multilateral trade liberalisation toward preferential liberalisation. This paper assesses the economic effects of AUSFTA by applying the Productivity Commission's gravity model of trade from its Bilateral and Regional Trade Agreements review. The evidence reveals AUSFTA resulted in a fall in Australian and US trade with the rest of the world—that the agreement led to trade diversion. Estimates also show that AUSFTA is associated with a reduction in trade between Australia and the United States.
    Original languageEnglish
    Pages (from-to)513-537
    JournalAustralian Journal of International Affairs
    Volume69
    Issue number5
    DOIs
    Publication statusPublished - 2015

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