Australian United States Free Trade Agreement

Australian United States Free Trade Agreement. Bilateral trade agreements are now essential for all nations due to the process of globalization that has characterized commercial and governmental operations in the modern world. Trading blocs have given their members increased bargaining power, access to export markets, and the chance to share expertise in order to boost trade and economic growth. To raise the living standards and possibilities for its inhabitants, governments negotiate accords with the global corporate world. The world trade organization is one of the organizations that governs and regulates how business is conducted on a global scale. Bilateral trade agreements prioritize removing or lowering trade tariffs, export restrictions, and import quotas. Trade agreements prevent dumping and use of unfair business subsidies, enhance labor standards and foster environmental preservation. Examples of free trade agreements include the deals between the United States of America and Australia in 2005, with Bahrain in 2006 and with Colombia in 2011 among others. Questions emerge on the relevance of bilateral trade agreements and the real benefits of free trade. The global business is characterized by varying resource endowment and economic capability. Ethical issues, consumption concerns and legislations are issues of contention as far as free trade agreements are concerned. The assessment of the Australia-United States of America free trade agreement helps in unraveling the implications of the agreement to both governments and the citizens of the two countries.

The Australia-United States of America free trade agreement was signed on January 1, 2005. The agreement is seen to have brought forth impressive benefits for the two countries. The Australia-United States of America free trade agreement marked its tenth anniversary in 2015 where an analysis on the agreement by a joint committee from both countries was done. The Australia-United States of America free trade agreement has enhanced trade between the United States and Australia. As at December 2015, the United States of America’s direct investment in Australia amounted to $860.3 billion which represented 28.4% of the total foreign investment stock in Australia. Also, the overseas investment of the Australians in the United States of America grew to $594.4 billion which represented 28.6% of total Australian overseas investment as at December 2015. The two-way trading activities in goods and services between the United States and Australia amounted to $70.2 billion. United States of America’s goods imports from Australia amounted to $14.2 billion while the goods exports to Australia were worth $33 billion. The United States of America’s service imports from Australia were $7.9 billion while the imports were $15.1 billion. The indications from the data from the 2015 Australia-United States of America free trade agreement analysis reflects the United States as the main beneficiary of the agreement with a positive balance of payment. The economic position of Australia and the United States of America differ significantly. Despite the parities in the balance of payment, the two countries are benefiting extensively having factored in the difference in the resource endowments of the two countries (States Government Accountability Office, 33).

The Australia-United States of America free trade agreement is creating product and opportunity to the citizens of both countries. The increase in economic activities between the United States of America and Australia creates direct and indirect employment opportunities for the citizens of both countries. The business communities in the two countries producing goods and services have a larger market for their products beyond their respective domestic markets. The Australia-United States of America free trade agreement waived two thirds of tariffs on agricultural products across the two countries. Agricultural products including the soybeans, vegetables, fresh and processed fruits, dried plums, potatoes, tomatoes, fresh grapes and sweet corn amongst others. Also, the Americans will be able to access the Australian agricultural products including beef, sheep meat and dairy products. The access to agricultural products at zero tariff rates is beneficial to the American citizens and the Australians. In the non-agricultural products, 99 percent of manufactured products exported to Australia are duty free. The removal of manufactured products tariffs will see an upsurge in the volume of exports to Australia. Manufactured products include; fabricated metal, auto, electrical appliances and equipments, construction equipments, scientific and medical items, fixtures and furniture, wood and paper. To ensure convenience and mutual benefit, mechanisms to solve non-tariff barriers have been put in place.

The Australia-United States of America free trade agreement is creating opportunity in the service industry. Exchange of services in education, business, and transport, professional and business sector has been made possible by the Australia-United States of America free trade agreement. The United States citizens can offer services in Australia with convenient work permit terms. Also, the American citizens can benefit from service inflow from Australia. The American financial sector is bound to benefit heavily from Australia-United States of America free trade agreement. The increased trading activities between Australia and United States will require funding from financial institutions. Credit services as well as financial advisers in the international business are being presented with an opportunity for business expansion and profitability. The Australian government has waived restrictions to favor United States of American firms to access Australian government procurement opportunities. Also, Australian investors can provide competitive products to the American federal government as well as the state governments (Lester, 76).

The Australia-United States of America free trade agreement recognizes the provisions as enshrined in the local and international intellectual property use and rights. Americans can now export their innovations in technology to Australia with guaranteed intellectual property rights protection. United States of America is the leading country in product innovation and creativity. The surplus products in America have a market in Australia as provided by the Australia-United States of America free trade agreement. The ability to export technology, innovation and creativity is creating product and opportunity for the American citizens. The overall implications of the Australia-United States of America free trade agreement as far as product and opportunity is concerned is a positive impact on the American citizens. Australia-United States of America free trade agreement is creating the expansion of American manufacturing sector and access to a bigger market. Also, Australia-United States of America free trade agreement is creating new opportunities for the farmers in the United States.

The Australia-United States of America free trade agreement is consumer centered. While creating the economic prosperity is a key feature in bilateral trade agreements, the Australian and United States governments have put measures to ensure prosperity of the United States citizens. Profits from the Australia-United States of America free trade agreement are immense with a positive balance of payment on the United States of America side. The Australian people are finding a bigger market for its industrial and consumer goods. In ensuring that the consumers and the American citizens are protected, the agreement provides for fair trade. Fair trade helps in ensuring that fair pieces are charged for the right quality of exports and imports while protecting local industries. The issue of genetically modified organisms has been an issue of contention across many economies. The Australian policy on food safety and quarantine regimes coupled with the United States regulations will ensure human health and environmental protection. The export and import products are subject to sanitary and health scrutiny. Agricultural products including citrus, pork, apples and stone fruits are subject to sanitary standards to protect the consumers of the two countries. To ensure plant and animal health, an agency was established by the Australia-United States of America free trade agreement to check on the matter. Inspection Service and Bio-security Australia are mandated with developing science-based interventions to guarantee animal and plant health safety.

The Australia-United States of America free trade agreement is established with the consumer well-being as a priority. The agreement recognizes the health of the citizens of both countries. The pharmaceuticals are subject to intellectual property protection under the Australia-United States of America free trade agreement. Also, the Australian and American citizens operating under the agreement are protected by the pharmaceuticals protection scheme (PBS). The agreement has established the Medicines Working Scheme to handle the healthcare issues that emerge over time. The Australian therapeutic goods administration and the United States of America food and drug administration is set to ensure quality medical products are available to the citizens. The Australia-United States of America free trade agreement provides for the protection of audio-visual rights. The regulation of the emerging media on radio and television media are recognized by the Australia-United States of America free trade agreement.

Several ethical issues are apparent in the Australia-United States of America free trade agreement. The issue on fair trade is paramount in the agreement. The balance of payment imbalance in the Australia-United States of America free trade agreement puts in question the intent of the agreement. The Australia-United States of America free trade agreement provides for the enforcement of the competition laws. Competition laws aim at curbing the unfair business practices that bring forth unethical competitive advantage. The Australia-United States of America free trade agreement provides for the establishment of the consumer protection agencies which will be mandated with detecting illegal trading activities. The investors and consumers defrauded under the Australia-United States of America free trade agreement will be availed with a redress avenue (Rugman, 47).

The Australia-United States of America free trade agreement is also subject to international and national legislative provisions. The world trading organization regulates international business. The trade between Australia and United States is structured to meet the world trading organization’s requirements. However, in the government procurement, Australia has not ratified the world trading organization agreement of government procurement. In this case, the American and the Australian government procurement laws take precedence. Corruption in trade under the Australia-United States of America free trade agreement is addressed under the United States as well as the Australian laws. The rights of the property owners are recognized under the common law and other relevant legislations. The Australia-United States of America free trade agreement recognizes the internet service providers and their liability. The United States of America millennium copyrights act provides the rules governing the infringement of rights by internet service providers. The international labor laws (IBL) protects for the recognition and protection of the rights of employees in the United States and Australia. Also, the Australia-United States of America free trade agreement has in it the Joint Statement on Environmental Cooperation to protect the environment.

Conclusion

Trade agreements emanate from negotiated terms between two countries with the main aim of benefiting the two countries. Economic development is realized when the citizens of a country are able to enhance their revenue earning capacity and improve their living standards. Australia-United States of America free trade agreement is built on ensuring consumer wellbeing and economic prosperity between Australia and United States of America. Profit is the main goal of any business undertaking. However, in the case of a government business deal, the wellbeing of the citizens supersedes the quest for presidency. Bilateral agreements provide product and opportunity to the citizens of the given countries. Countries are able to import and export goods and services as well as export technical expertise and technology at competent rates. The United States and Australia due to the existing comparative advantage are able to benefit from each other’s varying economic potentials. The Australia-United States of America free trade agreement depicts a balance between profits and the taking care of citizen’s needs. Fair trade, ethical standards and environmental preservation are addressed in the agreement. Also, international and national legislations guide in the implementation of bilateral trade agreements. Countries ought to embark in trade alliances to boost economic prosperity and ensure sustainable development.

References

Lester, Simon, Bryan Mercurio, and Lorand Bartels. Bilateral and Regional Trade Agreements: Commentary and Analysis. Cambridge: Cambridge University Press, 2015. Internet resource.

States Government Accountability Office. Trade Enforcement, Information on U.s. Agencies' Monitoring and Enforcement Resources for International Trade Agreements: Report to Congressional Committees. Wasington, D.C: United States Government Accountability Office, 2017. Internet resource.

Rugman, Alan M, Simon Collinson, and Rajneesh Narula. International Business. Harlow, United Kingdom: Pearson Education, 2017. Print.