Downloads

aus_us_fta.pdf

(Portable Document Format)

Report Summary

Modelling results

• A free trade agreement (FTA) between Australia and the United
  States has been proposed. This study models the measurable economic gains
  from trade for this FTA. It should be noted at the outset that this is
  a study that has not sought to determine Australia’s negotiating priorities or positions.

• Both Australia and the United States gain from the formation
  of a bilateral free trade agreement modelled here.
  • Welfare (as measured by real household consumption)
    and production (as measured by GDP) rise for both countries over time,
    with the removal of barriers to trade assumed to be over a five year
    period.
  • Using the APG-Cubed model, by 2006, when full implementation
    of the FTA is assumed, Australian welfare could be nearly 0.3 per cent
    above what it might otherwise be. This continues to rise to 0.4 per
    cent by 2010 and 0.5 per cent by 2020. For the United States, welfare
    peaks in 2006 at 0.016 per cent above what it otherwise might have
    been.
  • Australian GDP could be 0.33 per cent higher by 2006.
    This gap would then continue to widen, levelling off by 2010 at 0.4
    per cent of GDP – an annual increase in that year of nearly US$2 billion.
  • US GDP, even though rising only by 0.02 per cent above
    what it might otherwise be, still amounts to an annual increase of
    US$2.1 billion in 2006.

  (For complete
  Report Summary)

See also:

• An
  Australia-United States Free Trade Agreement - Issues and Implications