5 Jul 2011    Working Papers

Australian PTAs In Services: “Much Ado About Nothing”; Recent Unilateral Trade Policy Re-focus Promises Much More

NCCR Trade Working Paper No. 2011/62, by Malcolm Bosworth & Ray Trewin

Services trade liberalization promoting productivity growth has become a key issue, including in Australia. Preferential Trade Arrangements (PTAs) have been the focus of Australia’s trade policies over the past decade, at the expense of previous successful unilateral liberalization as part of domestic micro-economic reform. Australia’s experience with PTAs liberalizing its services trade barriers and delivering economic benefits has disappointed. They have focused instead, like all trade agreements, on commitments “on paper”, which usually bear little resemblance to actual measures. Thus, Australian PTAs have been “much ado about nothing”, an inevitable outcome since most services trade barriers lie “behind the border” in complex regulatory arrangements that serve both legitimate and protectionism objectives. Services trade measures cannot be sensibly set economically by negotiations, and must be effectively tackled, like all trade measures, through unilateralism built on domestic transparency. This is supported by a recent public Study by the Australian Productivity Commission which found the benefits, economic and otherwise, of Australia’s PTAs were oversold. There are promising signs that Australian trade policy is to return to its unilateral roots as the main means to reform Australian trade policies, including in services – a highly desirable outcome. 

NCCR Trade Working Paper No. 2011/62