Essays on FTA between Australia and South-East Asian Countries Case Study

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The paper "FTA between Australia and South-East Asian Countries" is a good example of a business case study.   With recent advancements in technology, the world has literally been transformed into a ‘ global village’ . For that reason, businesses and trade have generally been immensely impacted as there has been a greater need for countries to trade with each other more efficiently than before. In order to actualize this need, countries have resorted to cross-border trade and international investment agreements. According to Baier, & Bergstrand (2007), international investment agreements may be defined as a kind of treaty cementing the cross-border investments between the concerned countries with the main aim of protecting, enhancing, and liberalizing the cross-border investments. From the definition above, it can be derived that international investment agreements are fundamentally critical in helping to protect the foreign investments from their partner country in that country.

The same applies to the investment of that country in the country for which it has partnered with through the investment agreement. Cross-country trade agreements are also important in enhancing and liberalizing investments across partner countries by loosening excessive restrictions on foreign investments from partner countries (Baier, & Bergstrand, 2007).

Examples of international investment agreements include the ones signed by Australia with Japan, South Korea, and China in 2014. These agreements generated a discussion on the influence of free trade agreements in Australia’ s business opportunities in the Asia Pacific Region. This paper, therefore, reports on the Australian agricultural sector and the likely benefits of the investment agreements to the business firms in this sector. Specifically, the paper begins by discussing the reasons that may lead a country into signing free-trade agreements with other countries.

It then discusses the 2014 FTAs between Australia and South-East Asian countries and the opportunities that abound as a result of those FTAs. The report concludes by analysing the impacts of the FTAs especially to Australian businesses in the agricultural sector. Reasons to Sign FTA There are various reasons that make a country enter into free-trade agreements with another country. In most cases, such reasons apply for either party in the FTA. To begin with, a country may sign an FTA in order for it to boost its production in one of its sectors such as the agricultural sector.

According to Sen (2004), this goal is enhanced primarily through the competition that arises when FTA is signed. When a country signs an FTA with another country, it gives a conducive platform for foreign companies to operate within its boundaries. This, therefore, means that local companies will face intense competition from these foreign companies. Naturally, these companies will react by innovating more, producing high-quality products, and/or offering competitive prices for their products. Overall, such moves will increase production in the impacted sectors (Scollay & Gilbert, 2001). Secondly, a country may enter into FTAs with the view of enhancing its cooperation with the countries with which it signs the FTAs.

Strictly speaking, it is essential that the partner countries entering into an FTA have a smooth interaction with each other. Only then will trade between them flow as efficiently as is expected. Hilty (2004) posits that trade agreements are a fundamental pillar in cementing relationships between any two countries. It is for that reason that an FTA is highly recommended for countries that have a history of friction between them besides just targeting economic expansion.


Baier, S. L. & Bergstrand, J. H. (2007). Do trade agreement actually increase members’ international trade? Journal of International Economics, 71(2007), 72- 95.

Bohara, A., Gawande, K. & Sanguinetti, P. (2004). Trade diversion and declining tariffs: evidence from Mercosur. Journal of International Economics 64(2004), 65-88.

Hilty, R. M. (2012). Intellectual Property and Free Trade Agreements in the Asia-Pacific Region. Berlin: Springer Berlin.

Institute of Southeast Asian Studies. (2004). Australia-New Zealand & Southeast Asia relations: An agenda for closer cooperation. Singapore: ISEAS.

Kirchner, S. (2012). Foreign Direct Investment in Australia Following the Australia– US Free Trade Agreement. The Australian Economic Review, 45(4) 410–21.

Magee, C. (2008). New measures of trade creation and trade diversion. Journal of International Economics, 75(2008), 349-362.

Manchin, M. & Annette, P. (2008). Clothes without an Emperor: Analysis of the preferential tariffs in ASEAN. Journal of Asian Economics, 19(2008), 213-223.

Scollay, R., & Gilbert, J. P. (2001). New regional trading arrangements in the Asia Pacific? Washington, DC: Inst. for Internat. Economics.

Sen, R. (2004). Free trade agreements in Southeast Asia. Singapore: ISEAS.

Weatherbee, D. E. (2009). International relations in Southeast Asia: The struggle for autonomy. Lanham, Md: Rowman & Littlefield Publishers.

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