The paper "Australia-China FTA Negotiations" is a perfect example of a macro & microeconomics case study. Home to 1.3 billion people, China is considered to be a very big market that consumes anything from luxury commodities to food items. One of the few largest economies, China, as on date, is stated to be shaping the economy on the world front. Third of the world's gross domestic product is accounted for by China with a growth rate of 7 percent per annum. It has changed certain scenes in the world economy ever since it got integrated into it.
The result is today it is considered as a nation that has key drivers to propel economic growth (The Economist 2004a). Recently the country has taken steps to transform itself into a market-oriented system from its earlier system of central planning. Historically, it was on December 11, 2001, that China became a member of the WTO or the World Trade Organisation. To be on record it was the 143rd country to join WTO. Alliance with WTO created a mandatory need for it to liberalise trading programs, the first and foremost of which was a reduction of around 50 percent in the average tariff rate on import of products related to agriculture.
The earlier rate was 31.5 percent and the new rate 17.4 percent. Background Looking back, in 2003, China was to Australia's 7th largest export market and 3rd largest merchandise trading partner. In other words, at that point in time and even now, it can be deduced that a more liberalised China would mean greater income for Australia through exports and greater access to the Chinese market.
This is notwithstanding the fact that despite concerted efforts at both ends, some barriers, especially in services and commodities sectors, do persist. There is also widespread criticism that has been showered on the proposed free trade agreement between the two countries. Proposed FTA The free trade agreement between the two countries is a proposed one and both Chinese and Australian governments have been holding negotiations in this regard since 26 May 2005. The last negotiation round was 18th in the series and still, no breakthrough has been achieved to end the deadlock.
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