The paper "Australia-China Free Trade Agreement" is a good example of a macro & microeconomics case study. A free trade agreement in its most literal, ideal form is an agreement between two or more different countries not to impose tariffs or other restrictions on the flow of goods from one country to another. An ideal free trade agreement is a likely impossibility because all countries have an interest in protecting the prosperity of their own producers and merchants by ensuring, at a minimum, that their access to domestic markets is not placed at a disadvantage by the presence of foreign goods.
Thus, a working definition of a free trade agreement could be an agreement on transnational trade that approaches the idea of no restrictions, while maintaining a reasonable amount of safeguards for each country’ s domestic producers, and which has five key components (Matteucci, 2005): Free trade in goods, in accordance with ‘ origin rules’ concerning the sources of the component ingredients or parts of finished goods. Market access, meaning that tariff restrictions that are removed by a free trade agreement should not be replaced with other regulatory restrictions on where, how, or what amount of the goods reach the domestic market. Free trade in services as well as goods.
Examples of these would include banking, or purchasing insurance from foreign businesses. Sensible protection for intellectual property that encourages rather than stifles creativity and innovation. A clear process for dispute resolution. The Hub & Spoke Arrangement of FTAs The current shape of most of the world’ s free trade agreements is best described as a “ hub & spoke” arrangement. This occurs when one country has free trade agreements with two or more countries that do not have free trade agreements with each other.
(Alba, Hur, & Park, 2008) For example, Australia (together with New Zealand) has a free trade agreement with the ASEAN nations and one with the United States, but the US and the ASEAN nations do not yet have their own free trade agreement. In this instance, Australia is the “ hub” nation and the US and the members of ASEAN are the “ spokes” .
Adams, Philip D., and Yinhua, H. M. (2005) “Trade Liberalisation Scenarios for Wool Under an Australia-China Free Trade Agreement”. Monash University Centre of Policy Studies/IMPACT Working Paper g-156, October 2005. [Internet] Available from:
Alba, Joseph D., Hur, Jung, and Park, Donghyun. (2008) “E¬ffects of Hub-and-Spoke Free Trade Agreements on Trade: Panel Data Analysis”. Asian Development Bank Economics Working Paper Series No. 127, October 2008. [Internet] Available from:
Avila, John L. (2004) “A Comparative Study of Bilateral FTA/CEP Arrangements”. Philippine Institute for Development Studies Discussion Paper Series No. 2004-28, August 2004. [Internet] Available from:
Hufbauer, Gary C., and Wong, Yee. (2005) “Prospects for Regional Free Trade in Asia”. Institute for International Economics Working Paper No. 05-12, October 2005. [Internet] Available from:
Jones, Doug. (2009) “Australia: ASEAN-Australia-New Zealand Free Trade Agreement” Mondaq International Law, 17 March 2009. [Internet] Available from:
Kilby, James. (n.d.) “Submission to the Senate Select Committee on the Free Trade Agreement between Australia and the United States of America (AUSFTA)”. [Internet] Available from:
Matteucci, Aldo. (2005) “Free Trade Agreements: Praise & Prejudice”. Asia-Pacific Research Institute Asia Forum, 14 September 2005. [Internet] Available from:
Mercurio, Bryan. (2004) “Should Australia Continue Negotiating Bilateral Free Trade Agreements? A Practical Analysis”. University of New South Wales Law Journal, 27(3): 667-702. [Internet] Available from:
New, William. (2007) “USTR Toughens IP Stance On China, Russia, Thailand; Praises EU, Brazil”. Intellectual Property Watch, 30 April 2007. [Internet] Available from:
Sheehy, Benedict, and Maogoto, Jackson. (2005) “China-Australia Free Trade Agreement: An Opportunity for Fair Trade?” Macquarie Journal of Business Law, 2005 (2): 169-188. [Internet] Available from:
Siddique, Muhammed A. B. (2007) Regionalism, Trade and Economic Development in the Asia-Pacific Region. Cheltenham, UK: Edward Elgar.