Trade agreement between two or more countries play important role in rising economy. It assists corporate world to enter into international market and enhance overall rate of return. This aspect tends to support businesses in increasing gross domestic product and supporting economies to move into upward direction. Present report is based on comparison of bilateral treaties between Australia and France, Singapore-Australia. In the second aspect The Indonesia- Australia Comprehensive Economic Partnership agreement has also been explained. Furthermore, results derived from actions and treaties are also explained in the light of well bein
Australia And France Bilateral Treaties
Bilateral treaties, also called bipartite or contractual treaty refers to the restrictions that prevent transactions took place between two nations and international organization. France is the second most popular country of European Union (EU) having population of more than 64 million people. It is one of the leading industrialized nations having mature and highly sophisticated economic conditions. It maintains strong favorable and friendly relationship with the Australia (Figueiredo, Lima and Schaur, 2016). Bilateral relationship between both the countries is underpinned mainly by several historical links. For instance, co-operation between both the nations during first and Second World War and consular and diplomatic engagement strengthen their relationship to a great extent. Moreover, in recent years, Asia-Europe Meeting (ASEM), and membership forums G-20 proves as a significant step that helps to build stronger relationship between the countries.
During the period of 2013-2014, Australia’s participation in UN Security Council and other multilateral agreements has resulted in maximizing the scope for multiple bilateral engagement practices with the France. Bipartite Joint Statement of Strategic Partnership promotes and encourages both the nations to strengthen their relationship through better engagement. More importantly, in Pacific region, where they have joint interest, relationship can be strengthen by cooperating in different areas such as political, economic, defence, security and development as well.
Australia’s Free Trade Agreements (FTAs) legislation allow nation to carry out operations with the other nation without any restriction. With the help of this, nation became able to carry out international transactions and global investment in France. Both the countries make Foreign Direct Investment in each other (Hong and Pak, 2016). In the year 2015, Frane’s investment in Australia has been reported to 22.1 AUS billion dollar which was equal to 0.7% of overall FDI. Australia’s Trade Facilitation Agreement (TFAs) harmonized its international or foreign transactions practices that took place in France and other countries of the world. There is a substantial and solid bilateral trade and investment links between Franch and Australia can be evident through the trade merchandise agreements took place between nations in 2015 to 5.6 AUS billion dollar.
According to the FDI reports, in the year 2015, total export by Australia to France has been reported to 881 AUS billion dollar, however, on the other side, value of total import from France has been reported to 1.8 AUS billion Dollar (Australia’s FDI, 2016). Maximum and large proportion of import of service consists of personal travelling services. In the year 2015, total Australian Investment in France has been reported at 45.6 AUS billion dollar. In contrast to this, out of total France investment worth 22 AS billion dollar, 5.4 billion consists of foreign direct investment (Wang, 2016).
In Australia, out of total EU affiliates, 594 enterprises were followed by France, whilst, in term of sales to revenue, it is 25271 AS million dollar. Furthermore, according to the Direct Investment Survey report of International Monetary Fund, France invested larger stock in Australia as compare to reported ABS number as ABS data reported 5.5 AS billion dollar, however, IMF report determined investment of 8.3 AS billion dollar.
Regular Interaction and high level of contact between senior officials and ministers of both the Australian and French government maximizes co-operation and understanding among countries to a large extent. Due to the presence of FTAs, France became a valuable and most important partner nation of Australia.
It became possible because of high level of cooperation by both the member nations can be evident from wide range of initiatives like Joint Australia-France STI and HIV programs in Pacific Island. Moreover, in the area of defence, coordination for disaster relief under FRANZE (France-Australia-NewZeland) arrangement is an important step that strengthens their bilateral relationship (Wang, 2016). Joint meeting, Mutual Logistical Support Agreement, disaster relief initiatives and regional humanitarian assistance facilitates and encourages both the countries to exercise enormous coalition programmes together.
Singapore-Australia Free Trade Agreement (Safta)
The Singapore-Australia Foreign Trade agreement is considered as the central pillar for economic relationship (Singapore-Australia FTA, 2016). This tend to support economy to a great extent because export services of Australia raised in context of telecommunication, environment and professional services. This proves to be effective to have better business environment by focusing upon different aspects such as e-commerce, customs procedures as well as competition policy (Drysdale, 2011). It assists Australian business to easily access market of Singapore in term of different professional services such as legal, education, environmental and Austrade identified opportunities etc.
According to SAFTA all investors of Australia are treated on national basis just Singapore businesses. However, strong investor professional rules is contained under SAFTA under which Australian investors are free to take any action in case any of the mentioned rules is violated. Here, business operating in Australia are provided stability in Singapore so as to competent with local business effectively (Bayari, 2012). Though, there are some restriction related to investment in home country as Singapore which are publicly disclosed so as to have better relationship between countries. It can be critically evaluated that restriction are imposed for government linked organizations.
Anti-competitive practices are followed by home country Singapore for the purpose maintaining better relationship and giving upward direction to economy of both nations. At this juncture, government of both Singapore and Australia discuss regarding anti-competitive practices in any specific situation. However, focus is laid on government owned business under which no any competitive advantage is offered to business operating in any of countries. It enables Australian businesses to improve their conditions and export goods and services into market of Singapore without any kind of potential barriers.
Benefits of SAFTA
There are different benefits from NAFTA which are explained as follows-
- All tariffs in selling and purchasing of goods between Australia and Singapore are eliminated
- Ease in the restriction of number of wholesale banking licenses with the passage of time
- Effective operating environment for specific sector like financial service suppliers
- Extended period of residency requirement for Australian professionals
- Paperless trading for reducing transaction cost has also been introduced with SAFTA
It reflects that appropriate policies are applied in order to support business activities and generate higher rate of return to support economies of both mentioned nation. This proves to be effective to generate employment as well as entrepreneurship for better life style of people. In this regard, countries decided to charge zero customer duties on all of their transactions related to electronic transmission (McDonnell, Stanton and Burgess, 2011). It would be effective to support transaction of such kind of commodities in the country and higher rate of return would be generated by respective corporations. However, Singapore is considered as significant hub for South-East Asian region along with dynamic economic.
The manufacturing sectors and services are tow important in Singapore. At the same time, it is also considered as the most developed economy in Asia through which related countries can get benefit in term of good business perspectives and better relationship in the same context. Owing to this, Australian market invest in the same country to get easy access to Asian market (Prime, 2012). It proves to be effective for achieving better economies of scale and meeting expectations of related stakeholders. Owing to this, effective agreement was signed between both nation in order to attract more investors and determine success as well as growth of business operating in the respective nations.
Though, the country is in bilateral relationship with Singapore for trading and other related purpose. It is long term contract under which different areas such as defence, education, trade and tourism will be covered. This proves to be effective for securing rights of different parties and ensuring growth as well as development of included nations. In this manner, Australia-Singapore partnership tends to share strategic perspective along with complementary economies. However, they work on the basis of political stability and non-interrupted economic growth. At the same time, consultation is done with regard to global as well as regional issues. At the same time, stability and growth of region is determined with the help of strong relationship between Stable United States- China (Larum, 2011).
Indonesia-Australia Comprehensive Economic Partnership Agreement
It has been noticed that Indonesia-Australia comprehensive economic partnership agreement is one of critical aspect which assist in meeting economic development measures effectively. In march 2016 the negotiation in regard to the comprehensive economic partnership agreement is being taken into account from the side of leaders of both countries. In addition to this, it can be said that ministers has started working in collective manner which is named as IACEPA (Dwihastuti, 2012). The agreement is referred as high quality agreement which is beneficial to promote comprehensive aspects. IA-CEPA would seek to build on existing multilateral and regional agreements including AANZFTA.
In addition to this, it can be said that IA-CEPA is considered as key aspect that allows to overcome the gape in context to economic values between two largest economic plays. It indicates hat Indonesia and Australia are two key players in the market that helps in economic development effectively. Along with this, the agreement is also beneficial to promote the regional economic integration which helps in sustainable development. However, the negotiation and further activities in regard to the agreement is having a great impact on investment aspects between both nations. It also holds the influence over working of Southern Asian market. Indonesia is already a significant economic and regional partner for Australia (Dwihastuti, 2012). Two-way trade in goods and services was valued at $14.8 billion in the 2014-15 financial year. According to the report of
Australian government, it can be said that Indonesia is having a effective participation in trade activities which boosts the investment opportunities in the Australia. Indonesia is referred as 11th largest partner of Australia in context to export. As same the 12th rank in context to trade elements can be noticed the report of government.It has been witnessed that by having comprehensive economic partnership agreement the better support can be offered to two way investment policy. It is a policy in which both nations agree to have investment in each other geographical areas so that key values of partnership can be well maintained.
Along with this, the negotiation activities in regard to agreement has improved the estimated improvement such as $9.6 billion in year 2014. Along with this, it has been witnessed that Australian brands that operates in Indonesia are expecting great level of values due to agreement which will improve the overall outcome in diverse manner. Working of diverse sectors will also be advanced in appropriate manner so that goals and objectives can be accomplished in desired manner. Classification of key emerging sectors can be as energy, agriculture, infrastructure, finance, health care and logistics.
In addition to this, it can be said that there are number of benefits that can be promoted effectively due to comprehensive economic partnership agreement between Indonesia-Australia. With an assistance of this, trade standards can be improved as it allows to have development according to global values. Fair trade policies' promotion will also get advanced which will create better opportunities within organization. It has been noticed that improved negotiation may advance the working and IACEPA will assist in addressing the elements in context to bilateral trade.
With an assistance of the agreement the additional cost impose over exporters will be taken into account. Along with this, the customers may also face the impact outcome in diverse manner so government need to focus on such kind of aspects in appropriate manner.
It also has a great impact on the economic elements and help in gaining better competitiveness. Moreover, the comprehensive agreement which allows to have effective application of key aspects that are associated with investment activities. In addition to this, it can be said that key success elements of Australian investment policies can be advanced in appropriate manner so that goals and objectives can be accomplished in desired manner.
Along with this, it also impacts the opportunities for the Indonesia because it provides better opportunities to Indonesian businesses to have improved focus on application of diverse activities which can improve investment. Improved level of investment in both nations allows to make sure that work conditions and economic values can be advanced in appropriate manner. It is also advantageous to have better bilateral relationship in a number of important respects.
Other than this, the IACEPA is also beneficial to explore the different ways which allows improving the economic cooperation. It means the specific growth opportunities can be provided to diverse sectors. It allows having sustainable development and making sure that goals and objectives are being accomplished effectively. It is comprehensive agreement that allows to make sure about the investment within nation so that economic values can be advanced effectively.
Moreover, in the second phase the both nations has come together to make sure about key standards in regard to comprehensive economic partnership agreement. It means the opportunities for both platforms have also advanced in appropriate manner. In addition to this, it can be said that businesses that have operations in the both nations can have better trade relationship. It will allow improving the relationship between government bodies so that mutual interest can be created effectively. It will allow having effective accomplishment of activities and making sure that level of investment is properly maintained.
With an assistance of this, better strength can be provided to local businesses to have inter-nation partnership and investment so that economic development can be taken into account as per sustainable development standards. It has been noticed that negotiation on the second phase is well focused towards improvement in standards and policies. It has been witnessed that positive environment creation is a key motive which is beneficial to improve trade standards. Along with this, norms and activities are also need to be designed effectively so that barriers in regard to the working of economic values and investment can be improved. Progressive elements are being promoted effectively so that goals and objectives can be accomplished in desired manner. It will also improve the facilitation in regard to the two way trade policies so that goods and services can be shared effectively. It will also have positive impact on the economic values and investment policies.
In addition to this, it can be said that trade between both nations can be improved by having improved focus on such aspect. Along with this, the scope of Australian services and exports will also get advanced in appropriate manner so that goals and objectives can be accomplished in desired manner (Estimation report, 2015). Along with this, fluctuations in bilateral services trade, and particularly in Indonesian services exports to Australia, are largely driven by year-to-year variation in personal travel services. It means the working of travel sector and other specific industries will also get changed in appropriate manner so that goals and objectives can be accomplished in sustainable way. Moreover, the standards in regard to the export of services can also be improved effectively which will impact the investment ratio in positive manner.
Other than this, collective public services can also be taken into account due to comprehensive agreement between both parties is significant so that goals and objectives can be accomplished effectively. Flow of students between Australia and Indonesia can also be improved due to comprehensive partnership. It means the level of education system will also get advanced. It might because the industry is expecting positive impact on the overall outcome. It means the level of investment in education sector will also be advanced which will lead economic development to great context. It will also strengthen the economic values of both nations within Southern Asia.
It will allow to make sure that GDP and other aspects like inflation are also under control so that goals and objectives can be accomplished in desired manner. Although student enrolments from Indonesia have decreased, Indonesia is still a substantial consumer of Australia’s exports of education related services (Estimation report. 2015). By having improved focus on the agreement the issue in such regard can be overcome effectively so that sustainable development in regard to economic system can be attained. Moreover, the number of complementary aspects can also be promoted effectively due to improved focus on comprehensive partnership between both parties.
It can be concluded that that Indonesia-Australia comprehensive economic partnership agreement is one of critical aspect which assist in meeting economic development measures effectively. Negotiation in regard to the comprehensive economic partnership agreement is being taken into account from the side of leaders of both countries. By having comprehensive economic partnership agreement the better support can be offered to two way investment policy. It is a policy in which both nations agree to have investment in each other geographical areas so that key values of partnership can be well maintained. Fair trade policies' promotion will also get advanced which will create better opportunities within organization. It has been noticed that improved negotiation may advance the working and IACEPA will assist in addressing the elements in context to bilateral trade.
Economic partnership agreement between countries tend to focus upon well being of nation by supporting business to enter at international level and develop better relationship with each other. Australia enter into trade relationship with countries like Singapore, Indonesia and France. It aids to give several advantages in different forms (Hong-bo, 2010). For this purpose, Australia is relying upon different sources of foreign investment for arranging its domestic capital in the marketplace. This made it possible to ensure interrupted growth of country for 25 years. However, due to impact of foreign direct investment company can effectively contribute towards growth and development of citizen. However, FDI has significant impact on growth of Australia because it aids to generate employment,, higher growth of economy and standards of living etc are covered (Crotti, Cavoli and Wilson, 2010).
Owing to this, focus is laid on promoting foreign direct investment with liberalization of screening process at which private sector can easily invest into non-sensitive sectors for the purpose of investment. However, Australia focuses to retain the ability to screen all investment under sensitive sectors so as to secure national interest. However, government continuously screen the proposed investment with application of the same in agricultural and agribusinesses etc. However, Australian investors provided security when they make investment decision in TPP countries (Nyen Wong and Khoon Goh, 2013). For this purpose, treatment standard is minimized and discrimination level is reduced to a great extent. However, Australia gained popularity because of access to plenty of countries for the purpose of business and other related aspects. It facilitates to create positive impact on entire nation and ensure overall growth in the marketplace.
It can be critically evaluated that recently Australia might suffer to a great extent because of Brexit from EU as the nation has 1500 UK based companies (Post-Brexit, Australia’s best option is a trade pact with EU, 2016). Owing to this, poor economic situation of UK might harmful for number of companies which in turn affect gross domestic product of the same. Owing to this, free trade agreements were signed by business with number of countries like Japan, China and Korea as well as Trans-Pacific Partnership countries. This would be effective to access to important markets and increase overall rate of return for the businesses. Furthermore, competitive position of Australian exports will be improved by availing more prospects for enhanced two-way investment. Owing to this, different included countries tend to focus upon fair and equitable treatment as well as security along with full protection of related parties. This tends to cater need of both nations.
Above project report concluded that FDI plays an important role in the growth and development of Australia, France, Indonesia and other nations. Higher the value of FDI inflow from other countries enable domestic businesses or companies to achieve their targets by generating maximum revenue, meet out capital requirement, enhance competitive strength and maximize profitability as well. Moreover, from the report, it has been inferred that free trade policy, agreements and cross-border transactions at large scale enable countries to maximize their GDP, reduce unemployment and increase growth rate.
- Bayari, C.E.L.A.L., 2012. The Patterns of Japanese FDI in Australia after the Lehman Shock: Perspectives of the Eclectic Paradigm and Institutional Economics.Euro Asia Journal of Management.
- Crotti, S., Cavoli, T. and Wilson, J.K., 2010. The impact of trade and investment agreements on Australia's inward FDI flows.Australian Economic Papers.
- Drysdale, P., 2011. A new look at Chinese FDI in Australia.China & World Economy.
- Dwihastuti, A., 2012. Dampak Indonesia-australia comprehensive economic partnership agreement (ia-cepa) terhadap dinamika perekonomian Indonesia menggunakan global trade analysis project (gtap).Journals about agreement.
- Figueiredo, E., Lima, L.R. and Schaur, G., 2016. The effect of the Euro on the bilateral trade distribution.Empirical Economics.