ITC Issues Report on Potential Economic Effects of the U.S.- Australia FTA
On May 24, 2004, the International Trade Commission (ITC) released a report entitled, U.S.-Australia Free Trade Agreement: Potential Economywide and Selected Sectoral Effects. According to the ITC, this report assesses the comprehensive bilateral free trade agreement (FTA) that the President has entered into with Australia.
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Highlights of ITC's Quantitative Analysis of the Australia FTA's Effects
Among other methods used in this report for examining the effects of the Australia FTA, the ITC has employed a quantitative approach that assesses only the liberalization of tariffs and tariff-rate quotas (TRQs). Using this approach, the ITC makes the following findings with respect to the complete implementation of the Australia FTA as well as full phase-in of tariff liberalization (partial list):
U.S. Exports.Economy-wide. U.S. exports to the world are likely to be higher by 0.13%. For U.S. bilateral exports the largest increases are expected to be for: coal, oil, gas, etc.; processed food; textile, apparel, and leather products; motor vehicles and parts; ferrous metals; and wood products. The ITC notes that key U.S. exports will gain immediate duty-free access.
Sectoral. With respect to exports, the ITC finds that after full phase-in of tariff cuts, U.S. exports to Australia of coal, oil gas, etc. would likely increase by 533.29%; processed foods, 62.43%; textile, apparel, and leather products, 87.16%; motor vehicle and parts, 43.32%; ferrous metals, 34.45%; and wood products, 30.19%. As a whole, U.S. exports to Australia would increase by 14.1%
U.S. Imports.Economy-wide. After full phase-in of tariff cuts, U.S. imports are likely to be 0.07% higher. For U.S. bilateral imports, the largest increases are expected to be for: meat products; processed foods; textiles and apparel; chemicals, rubber, and plastic; and motor vehicles and parts. In most cases, the increases in trade with Australia come at the expense of trade with other partners.
Sectoral. The ITC projects that after full phase-in of tariff cuts, U.S. imports from Australia of meat products increase 55.2%; textiles, 57.7% (rules of origin will limit the model-simulated gains); processed food, 37.6%; chemicals, rubber, and plastic, 21.0%; and motor vehicles and parts, 21.5%. The ITC adds that imports from Australia as a whole would increase by 15.5%.
(See the ITC's report for the results of other analysis methods, sector-specific findings, etc. See ITT's Online Archives or 05/20/04 news, 04052005, for BP summary of the signing of the Australia FTA.)
ITC Press Release (Release 04-046, dated 05/24/04) available at http://www.usitc.gov/er/nl2004/er0524bb2.htm
ITC Report (Inv. No. TA-2104-11, dated 05/24/04) available atftp://ftp.usitc.gov/pub/reports/studies/PUB3697.PDF