The "empty promises" of Free Trade Agreements (FTAs) have hurt rather than helped Australian agriculture, according to a QUT economist.
With continuing debate over the historic FTA signed between Australia and China in June, Dr Mark McGovern, from QUT Business School, warned previous deals had not brought Australia the benefits promised.
Dr McGovern analysed OECD statistics to find the balance of trade positions for Australian agriculture and food manufacturing (A&F) had deteriorated since beginning FTAs with New Zealand, the USA and Thailand.
"The long-standing 1983 New Zealand arrangement shows imports of processed food products have increased, especially since 2000. Australian food exports to New Zealand have levelled off since 2011 with a US$600 million Australian deficit on food products in 2014," he said.
"The net result (shown in black on pictured graph) has been a persistent and generally worsening deficit for Australia in its A&F trade with New Zealand for the whole period."
Dr McGovern said the agreement with the US, which took effect in 2005, had seen the surplus of Australian exports to imports halved in the period to 2013.
"Our food exports to the US almost doubled in 2014, but this could be the result of drought-affected Queensland graziers running down their herds and is likely a one-off spike," he said.
"The net result has been a persistent and generally narrowing surplus for Australia in its A&F trade with the US since the FTA came into play."
Australia and Thailand signed a bilateral agreement in 2005 and Dr McGovern said the result had been a generally worsening A&F trade deficit.
"In the decade to 2011 Australian food product imports from Thailand rose substantially from more than US$200 million to US$800 million," he said.
"Agricultural and food exports to Thailand enjoyed a rise a few years ago but have since fallen back."
Dr McGovern said the three agreements had "clearly failed to deliver".
"There has been deterioration in the A&F trade position under each of the three agreements," he said.
"Australia's trade performance with the rest of the world has been better than with non-agreement partners.
"These figures clearly show FTA 'partners' have increasingly outperformed Australian enterprises."
Dr McGovern said using history as a guide, the agricultural industries should be wary about Australia's three North Asian Agreements and the prospect of a Trans-Pacific Partnership.
"History suggests no necessary gains from these agreements and potentially trending losses on merchandise trade for both food manufacturing and agricultural industries," he said.
"We should be more closely engaging with the realities of trade, not fixating on rhetoric and empty promises.
"There is nothing 'free' about these trade agreements."
Read more at The Conversation
Media contact:
Rob Kidd, QUT Media, 07 3138 1841, rj.kidd@qut.edu.au
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