Free Trade Agreement between Australia and GCC: A Boon or a Bane?

In November 2021, a Free Trade Agreement (FTA) between Australia and the Gulf Cooperation Council (GCC) was announced. With this agreement, both regions aim to strengthen economic ties and increase trade opportunities. The GCC is a strong and growing market with a combined GDP of over $1.6 trillion, while Australia is a trade powerhouse with a diverse economy. While the FTA has been welcomed by many, there are concerns about its potential impact on various sectors. In this article, we will look at the benefits and drawbacks of the FTA.

Benefits of the FTA:

1. Increased trade opportunities: The FTA will remove tariffs on goods and services traded between the two regions, making it easier and more cost-effective for businesses to export and import. This will lead to increased trade between the two regions, benefitting both sides.

2. Improved market access: The FTA will allow Australian businesses to access the GCC market, which is known for its high purchasing power and wealth. This will create new markets for Australian goods and services, leading to increased revenue and job opportunities.

3. Increased competitiveness: With the removal of tariffs and greater market access, Australian businesses will be able to compete more effectively with other countries that already have FTAs with the GCC.

4. Cultural exchange: The FTA will also promote cultural exchange between the two regions, leading to a better understanding of each other`s culture and values.

Drawbacks of the FTA:

1. Impact on the agriculture sector: The FTA is expected to have a significant impact on the Australian agriculture sector, as it will lead to increased competition from GCC countries. This may lead to a reduction in revenue for Australian farmers and a loss of jobs in the sector.

2. Environmental concerns: The GCC is largely dependent on oil and gas exports, which have a significant impact on the environment. The increased trade between the two regions may lead to an increase in greenhouse gas emissions and other environmental concerns.

3. Impact on small businesses: The FTA may benefit larger businesses, but smaller businesses may struggle to compete and may face additional costs associated with compliance with FTA regulations.

4. Human rights concerns: Some critics have raised concerns about the human rights record of some GCC countries, particularly in relation to the treatment of women and migrant workers. The FTA may give legitimacy to these countries and make it harder to address these issues.

Conclusion:

The Australia-GCC FTA offers many opportunities and challenges. While it will lead to increased trade and economic growth, there are also concerns about its impact on various sectors and the environment. It is important to carefully assess the benefits and drawbacks of the FTA and take steps to address any negative impacts. Overall, the FTA has the potential to be a significant step towards strengthening economic ties and promoting cultural exchange between Australia and the GCC.