Thursday, August 21, 2014

Businesses don't understand FTAs, so how will they deal with the TPP?

http://www.businessspectator.com.au/article/2014/8/22/china/businesses-dont-understand-ftas-so-how-will-they-deal-tpp

Australian entrepreneur Dean Flintoff runs a clothing business with his wife Madeline out of Adelaide. It’s a roaring success of a small business; it provides clothing to nine fashion labels and distributes to over 20 countries.

To keep his costs down, Dean produces his goods in China and then ships them around the world. He has a stake in the rise of globalisation and in the government's ongoing efforts to broker new free trade agreements -- especially with China.

But there’s a hitch: Dean is perplexed by Australia’s existing FTAs. All 10 of them. 
"I was reading a few last night and I thought 'wow'," Flintoff said. He piled through agreements in anticipation of a media briefing on the matter.

"It’s the non-tariff things that gets very complicated and that’s more of a benefit to us," he added.

Most traders understand the basics of FTAs: They offer certain goods exemption from trade-related taxes and allow for cheaper and more (hopefully) profitable trade. But that’s just the surface of these rather labyrinthine documents.

The problem is that Australia’s ignorance of FTAs extends far beyond Dean’s fashion outfit. Recent HSBC research has established that the majority of businesses fail to harness these agreements in their dealings, simply because they don’t understand them. Australia ranked below the APAC average, and second last to Malaysia in HSBC’s study.

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