A Charles Sturt University (CSU) economics expert believes the proposed free trade agreement (FTA) between Australia and China will be in the best interests of consumers in both countries.

 

Professor John Hicks, a senior researcher with CSU’s Institute for Land, Water and Society, believes that  the FTA will give consumers unfettered access to the best goods and services at the best prices. Prime Minister Tony Abbott recently revitalised negotiations on the FTA with China.

 

“Trade restrictions decrease the welfare of consumers, and anything that can be done to reduce such barriers will benefit consumers,” Professor Hicks said.

 

“The proposed Australia-China Free Trade Agreement will reduce restrictions on trade, but not all. Negotiations have been on-going since 2005, which shows a lot of vested interests are advocating the maintenance of their special elements of protection.

 

“If they are maintained, these industries will continue to receive some protection, but at a welfare cost to the welfare of consumers of both countries. We want the best price for the goods we purchase, and we access to markets where we can compete strongly.”

 

Professor Hicks believes excellent opportunities exist now and in future for Australians to export services such as education and finance to China.

 

“Exporting Australian services to China has great potential, as long as the Chinese government does not provide impediments,” he said.

 

“And Chinese firms manufacture goods such as cars at a much lower cost than Australian firms so would be of great benefit to Australian consumers provided the Australian government does not agree to boost their price by maintaining current ‘protective’ measures.”

 

Professor Hicks believes another area of economic potential is Chinese investment in Australia which would generate a much more efficient use of national resources.

 

“It is not of much use keeping resources in the hands of Australians if Australians cannot make best use of those resources. Failure to make the best use of the resources we have is waste,” Professor Hicks said.