Title: The proposed Australia-China Free Trade Agreement: global and country-specific effects

Authors: Mahinda Siriwardana

Addresses: School of Business, Economics and Public Policy, University of New England, Armidale, NSW 2351, Australia

Abstract: Australia has signed Free Trade Agreements (FTAs) with Singapore, Thailand and the USA. This paper analyses the economic effects of the proposed FTA between Australia and China, drawing lessons from simulations undertaken using the GTAP model. The paper provides quantitative evidence concerning the welfare impact of the FTA with special reference to trade creation and trade diversion. Examining responses of various production sectors identifies the structural changes that may take place in the two economies over the long run. The findings may shed light on the debate over the potential incentives to participate in the agreement.

Keywords: GTAP model; global trade analysis project; FTA; free trade agreements; Australia; China; simulation; welfare impact; trade creation; trade diversion; structural changes; incentives.

DOI: 10.1504/IJTGM.2008.021399

International Journal of Trade and Global Markets, 2008 Vol.1 No.4, pp.392 - 408

Published online: 22 Nov 2008 *

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