Australia's trade policy dilemmas

Abstract

In recent years, Australia has had a very active agenda for the negotiation of preferential trade agreements (PTAs) whose net economic benefits remain at best unclear. There has been a strong defensive element to some of this PTA activity but the Howard government also used PTAs to pursue non-economic objectives, such as the promotion of foreign policy and security interests. This article broadly outlines Australia's PTA policy and the problems and dilemmas that it has generated. More importantly, it looks ahead to consider likely scenarios for trade policy under the Rudd Labor government. Each of these scenarios has different implications for policy strategies and outcomes. This article concludes that while there could be significant pay-offs should Labor choose to pursue its traditional preferences for non-discriminatory trade arrangements, the world has changed considerably since the heydays of the multilateral trade system. A commitment to reinvigorating multilateralism will require strong political leadership, imaginative thinking, and creative diplomacy.