(NON) USE OF FTAS – RELEASE OF HSBC SURVEY
An ongoing issue has been the apparent under-utilisation of free trade agreements (FTAs) and how that can be remedied given the work undertaken to put them into place and the very real benefits which can accrue from use of the FTAs. This is a live issue given the recent completion of FTAs with Korea and Japan and the potential FTA with the PRC along with the work on the TPP and RCEP. The issue of use of FTAs was a focus of the Productivity Commission Research Report entitled ‘Bilateral and Regional Trade Agreements’ issued in November 2010 and in the recent B20 Trade Recommendations of the B20 Trade Taskforce The issue was also investigated and addressed in the Survey entitled ‘FTAs : fantastic, fine or futile? Business views on Trade Agreements in Asia’ from The Economist Intelligence Unit, which was sponsored by HSBC and released in August 2014. One of the most striking findings of the Survey was the low usage of FTAs in the region including a mere usage of 19 per cent in Australia. Ironically, the Survey also recorded that those respondents which did use FTAs reported an 85 per cent increase in trade.
The Survey identified some reasons for low usage including:
– lack of awareness;
– the need for Government to supply better information.