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21 April 2005
A Free Trade Agreement between Australia and China would substantially benefit both countries, an analysis by Monash University's Centre of Policy Studies has found.
The centre was commissioned by the Australian Department of Foreign Affairs and Trade to conduct a modelling analysis on the potential benefits of an Australia-China FTA. The study was undertaken jointly with experts from the Chinese Academy of Social Sciences and Nankai University.
Centre director Professor Philip Adams said the negotiations currently underway to establish an FTA between Australia and China began after consideration of this study.
He said the study, which was completed in March, concluded that an FTA would yield increased output and enhance welfare.
"By 2015 the FTA is estimated to boost Australia's real Gross Domestic Product (GDP) by an extra US$3 billion and real Gross National Product (GNP) by an extra US$3.5 billion," Professor Adams said. " China 's real GDP is estimated to grow by more than US$10 billion and real GNP by almost US$10 billion."
Professor Adams said real GDP would increase in both countries due to increased capital, improved productivity and better use of resources.
"The Australian industries which will benefit most from the FTA are cereal grains, wool, wool tops, minerals, and non-ferrous metals," he said. "Chinese manufacturing industries, especially textiles, wearing apparel and miscellaneous manufactures (such as toys and sporting goods) are also expected to profit from the FTA."
The Centre of Policy Studies report can be accessed at http://www.dfat.gov.au/ge o/china/fta/index.html.
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