Free trade agreement in the wine sector

Résumé du document

Nowadays, Australia is dealing with some new free trade agreements, such as the Australian-Chinese free trade agreements. We will be looking on how can it benefit to Australia and can change the economic situation of the country. To support this theory, we choose to focus our analysis on a booming success of Australia: the wine industry. In an overview of the Australian economy, we will be heading towards a deeper study of the wine sector and strive to define its foundations. Parallel to this, we tried to dissect the principles and objectives of the Free Trade Agreements. We analyzed the Australian wine industry by taking the example of Foster Group winery and Jacob's Creek. As the free trade agreements concern both China and Australia, we also studied their bilateral relationship, and tried to define the Chinese behavior changes according to the wine sector. For which one of these countries are the free trade agreements more profitable, and are there already criticisms about it?

Extraits

[...] Thanks to FTA between Australia and China and remarkable reducing of tariffs the amount of volumeshad increased almost twice and was 492,000 liters" (jacobcreek.com). Case study: Foster With a portfolio of more than 200 premium brands, operations on five continents and a history stretching back over 160 years, they've built something unique at Foster's. As the leading alcohol company in Australia and the Pacific, Foster's is the proud owner of the region's favourite brands and the world's most famous Australian beer; Foster's Lager. [...]

[...] Siriwardana, & Yang, J 2008, ‘GTAP Model Analysis of the Economic Effects of an Australia-China FTA: Welfare and Sectoral Aspects', Global Economic Review, vol no pp 341-362. Slinkard ‘Jacob's Creek Wines-The Heritage Range' from interview with Laffer Philip, viewed on 15 May Thailand-Australia Free Trade Agreement (TAFTA), Department of Foreign Affairs and Trade, Australian government, viewed on 19 April 2009, [...]

[...] FTA impacts on Australian wine industry The Australian Wine and Brandy Corporation have identified China as a priority emerging market for the Australian wine industry and are strongly supportive of the FTA (Dean, 2005). It represents several opportunities and challenges by Australian wine sectors to export in China. Firstly, tariffs and taxes are reduced dramatically since China accession to the WTO which has positively influence to Australian wine sector by lower price and high volume. Secondly, it provided transparency of wine regulations in English which means more clear definitions would be explain to foreign industries. [...]

[...] The Pacific Agreement on Closer Economic Relations (PACER) was first signed in August 2001 between members of the Pacific Islands Forum (the Forum Island Countries plus Australia and New Zealand). This Agreement provides a framework for the future development of trade cooperation (www.forumsec.org). Most recently, Australia signed the AANZFTA (ASEAN-Australia-New Zealand Free Trade Agreement) on 27 February 2009 (dfat.gov.au/asean/index). This is the first FTA signed by Australia since the commencement of the global financial crisis. It is one of the most comprehensive trade agreements ASEAN signed. The FTA covers goods, services, investment, intellectual property, e-commerce, and economic cooperation. [...]

[...] China presents major challenges in terms of culture, language and knowledge of operating environment; as well as Intellectual property protection and enforcement strategies. Foster requires a long term investment strategy (Foster group, 2007) Foster group estimated 50-250 millions potential wine consumers in China in 2007. That is why, it is finally a good time for Foster to export wine in China. Firstly, their income levels grow and their appreciation of wine too. Moreover, the reduction in import tariffs lead to greater potential for export growth. However, one of the major issues faced by Foster is the Intellectual Property. [...]