Free Trade Agreements - Australia and Germany
This week in class, we were asked if Germany or Australia would be a better fit for our hypothetical expanding business. Depending on the industry your business represents, either country could be a good fit. However, one factor that should be considered is trade agreements and how these agreements may affect your business. While the United States doesn't have any agreements specifically with Germany, there is currently a free trade agreement with the EU in negotiations (T-TIP). Australia already has a free trade agreement set in place (AUFTA). Below I have included links outlining both agreements.
AUFTA https://ustr.gov/trade-agreements/free-trade-agreements/australian-fta
T-TIP https://ustr.gov/ttip
- Nicole
Nicole, I agree with you. It all depends on the industry of the business. The AUSFTA eliminated import tariffs on 99% of US manufactured industrial and consumer goods, and 100% of US agricultural products. This has continued to create export opportunities for US manufacturers and farmers. Australia is an open market with minimal restrictions on imports of goods and services. Australia has bilateral free trade agreements (FTAs) with multi-nations. I think Australia is a good destination for agriculture industry because there are lots of available land to use, the abundant of resources, the benefit of free trade with the US, etc..
ReplyDeleteWhile Germany still presents few formal barriers to U.S. trade or investment. Germany's regulations and bureaucratic procedures can be a difficult hurdle for companies wishing to enter the market and require close attention by US exporters.The T-TIP is being negotiated and hopefully soon it will be a a bilateral free trade treaty between the EU and the US. I think businesses that make high-tech products (computers, computer software, automotive tech, etc...) would do very well in Germany because Germany has highest Internet access rates in the EU and multi-media, high-tech and service areas offer great potential.
The T-TIP has the potential to open so many doors for EU/US trade. Hopefully the presence of the T-TIP will help give those companies wishing to enter the German market the extra motivation to overcome Germany's regulations/procedures. I agree that those businesses that produce high-tech products could potentially do really well in Germany.
ReplyDeleteThank you for your comment!
Nicole