Australia’s

Free Trade
Agreements
(FTA’s)

Y E A R 9

E C O N O M I C S A N D
B U S I N E S S
What is a tariff?
• A tariff is a tax collected by the government on goods and services that are imported
from other counties. It is also known as a ‘duty’.

• Governments charge tariffs on imported goods for 2 main reasons:

1. Charging a tariff raises money for the government, which they can then spend on
running the country.

2. Tariffs make imported products more expensive, protecting companies that can’t
compete with cheap products made overseas. It helps them remain competitive.
Free Trade Agreements (FTA’s)
• A free trade agreement (FTA) is an international treaty between two or more
economies (countries) that reduces or eliminates tariffs, making trade cheaper and
easier.

• Australia has fourteen free trade agreements in force.

• Australia's prosperity depends on open trade and investment arrangements with other
countries.

• Free trade agreements contribute to greater economic activity and job creation in Australia
and deliver opportunities for big and small Australian businesses to benefit from greater
trade and investment.
 Task: Draw a table in your books like this:
Make a list of all the benefits of FTAs, and all the problems of FTAs

Benefit Problems

Use this website to help you

https://www.thebalance.com/free-trade-agreement-pros-and-cons-3305845
Did you think of any others?
• Australia currently has 14 FTA’s as at March 2020
• Most of these are bilateral and two are regional agreements
• New FTA’s with Hong Kong and Peru came into force January 17 and February 11 2020
• FTA’s concluded by not yet in force: Indonesia-Australia Comprehensive Economic Partnership
Agreement (IA-CEPA) and Pacific Agreement on Closer Economic Relations Plus (PACER Plus).
• Under negotiation: European Union, Pacific Alliance, Australia – United Kingdom