The Proposed Australia-China FTA: Protectionism over Complementarity?

This article deals with the proposed high-profile Australia-China Free Trade Agreement (FTA). It recognizes their economic complementarities for an FTA. However, their negotiations reveal many competing interests, militating against an FTA. If political enthusiasm succeeds in concluding this FTA, it is likely to fall short of delivering the projected economic benefits. This FTA will possibly be an inward looking discriminatory trading arrangement with exclusive preference to each other in selective sectors and protection against non-members, inconsistent with Article XXIV of the General Agreement on Tariffs and Trade (GATT). Such protectionist obsessions have become an obstructive alternative to multilateral nondiscriminatory trade rendering it more onerous and less viable. Concluding such an FTA, at a time when World Trade Organization (WTO) Panels and Appellate Body (AB) are increasingly dealing with FTA disputes, may result in a legal challenge. The booming Australian and Chinese export sectors need open global markets to maximize their full trade potentials, which can be achieved through the completion of the Doha Round.