asian economics assignment
...ation, have included promotion for free trade of goods and capital. Formation of multinational trading bloc by the free trade agreement is due to ensure the economic growth and benefit of the participating countries. Currently there are more than 120 regional free trade areas worldwide. Among the better known ones existing today are the EU, NAFTA, ASEAN etc.(Kotabe, 2005, page 54) The existence and growing influence of these multinational groupings mean that nations need to become part of such groups to remain globally competitive. A free trade agreement has a high level of integration and is a formal agreement among two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries. And it is common that agreements are formed for certain classes such as automobile products only. Australia and New Zealand are two of a limited number of significant economies that do not have an FTA with any of the major world economies, although as the scene setter suggested, there have been significant negotiations between Australia and the United States on an FTA and intensified negotiations between Australia and China on FTA. Australia is currently subject to relatively high tariffs in many markets, competing against trading partners, which may enjoy preferential tariff rates or be moving to free trade. However, in early 2004 ASEAN invited Australia and New Zealand to join negotiations to liberalise trade between the ASEAN free trade area and the Trans-Tactman pact known as closer economic relations. And Australia reached an agreement to negotiate an FTA with the fast-growing ASEAN by 2007(internet article: FTA to reshape Aussie and Asia auto market, 2005). Undoubtedly, a closer economic integration would be very significant to the both Australia and New Zealand economies. In addition, Australia¡¦s recent bilateral FTAs with Thailand and Singapore will ensure closer links with other countries in the ASEAN free trade area. (Kotler, 2003, page 543) Secondly, what is the benefit of forming Free Trade...