The Exaggeration over Free Trade Agreements.Sep 16, 2015
I have posted many blogs in the last couple of years concerning the Free Trade Agreements with the Republic of Korea, Japan and China. I have pointed out that the years of negotiation of these agreements occurred under the Rudd and Gillard governments. The Abbott government gave the agreements the final touch. The other issues that I have raised is that the Abbott government has seriously exaggerated the benefits of the FTAs. Andrew Robb has referred to them as ‘turbo-charging’ the Australian economy. That is nonsense but unfortunately the exaggerated nonsense continues even with the new Prime Minister, Malcolm Turnbull. The FTAs are useful but we need to keep them in proportion.
Over a decade ago, we had a great deal of exaggeration about the FTA that John Howard negotiated with President Bush. It turns out that there was a negative effect on Australia of this FTA.
In this blog on 10 September 2015 I drew attention to an article by Peter Dixon and Maureen Rimmer ‘What’s really at stake if the China FTA falls through’. Dixon and Rimmer wrote that ‘Economic modelling for the Department of Foreign Affairs and Trade by the Centre for International Economics (CIE) demonstrates the gains of the agreement (with China) will be modest. The CIE estimates the gain in economic welfare from the three North Asian FTAs … will be 0.4%.’
In the SMH on September 15, the Economic Editor of the Age, Peter Martin, wrote about the impact of the China-Australia Free Trade Agreement. The article was headed ‘How many jobs? The China-Australia Free Trade Agreement will create hardly any’. Peter Martin commented ‘[the China-Australia Free Trade Agreement] will create only a few thousand jobs, according to the government’s own modelling, conducted by the Canberra-based Centre for International Economics. But you wouldn’t know it from the way the modelling has been mangled and butchered by the government.’ For Peter Martin’s article, see link below. The government’s exaggerations about FTAs have become a scandal. John Menadue