The United States has asked Japan and some other members of the Asia-Pacific Economic Cooperation (APEC) forum to consider a regional free trade agreement, the Kyodo news agency has reported.

Japan’s vice minister of economy, trade and industry, Takao Kitabata, says the agreement would cover 60% of the world’s gross domestic product.

Industry analysts say the proposal reflects US concerns that its economic influence in East Asia and the Asia-Pacific region could weaken now Japan and other Asian economies are advancing talks on creating regional FTAs.

But how well has the Australia/US FTA worked? The ANU’s Andrew Leigh has some thoughts on his blog:

John Howard talking about the US-Australia FTA in February 2004:

And that is why the massive opening up of service and manufacturing opportunities that this deal affords is so very important.

So this is very much about the future rather than the past. This is very much about a test of the capacity of this country to grab yet another opportunity and I am very strongly committed to this agreement because I believe it will further strengthen the Australian economy. It will link Australia’s economy with the biggest economy in the world and an economy whose importance to Australia will grow rather than diminish. …

Of course there’ll be very big export opportunities opened up.

And here’s our trade pattern with the US, and with the rest of the world, before and after the deal was passed.

 

Click for larger images 

Does anyone see any FTA effects? I don’t.

Peter Fray

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