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Free Trade Agreement


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Free Trade Agreements in Australia’s economy

Free Trade Agreement (FTA) Free trade agreement (FTA) is described as a treaty between two or more countries so as to create a free trade area. The free trade involves commerce in goods and services being carried out across the borders without any hindrances. The FTA always involve around the playing around with the tariffs. In an FTA agreement between two countries or more the tariffs are made common, that is, uniform tariffs among them and with other non-member countries. In FTA, the labor and capital may not move freely. Baykitch and Sladojevic (2015) explains that when an FTA agreement is made the countries or the companies involved the deal may not be welcomed by either the parties involved but when they both work towards it the realization of the agreement it becomes easy. It is also beneficial to both the countries because it enables the citizens to move freely for the betterment of the economy (Baykitch and Sladojevic 2015).
China – Australia Free Trade Agreement An example of FTA agreement is the recent china-Australian agreement. The FTA agreement is considered to be beneficial to Australia in very many ways. Ball says that given that China has a population of above 13 million it opens the market for the Australian products. China is also the second-largest economy in the world's considering that is also an important manufacturing hub for the world products. It was important for the Australia to form free trade agreement because of various factors. China is the largest trading partner to Australia (Ganz 2015). It is also a fact that the merchandise trade between Australia and China has grown tremendously with a significantly notable 18 percent increase every year for the last decade. The another major factor is the fact that over the years the investment

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