dicuss the effects of one multilateral free trade agreement on the australian economy (6marks)

Increased Market Access: One of the primary effects of a multilateral free trade agreement on the Australian economy is increased market access. This means that Australian businesses can sell their goods and services to more countries, leading to increased sales and profits. For example, the Australia-United States Free Trade Agreement (AUSFTA) has led to a significant increase in Australian exports to the U.S.

Economic Growth: Free trade agreements can stimulate economic growth. By removing barriers to trade, they can increase economic activity and create jobs. According to the Department of Foreign Affairs and Trade, Australia's 14 free trade agreements with 22 countries have collectively increased Australia's GDP by over 2%.

Lower Prices for Consumers: Free trade agreements can lead to lower prices for consumers by reducing tariffs and import quotas. This means that Australian consumers can benefit from a wider range of goods and services at lower prices.

Increased Competition: Free trade agreements can increase competition by allowing more foreign businesses to enter the Australian market. This can lead to improvements in product quality and innovation.

Potential for Job Losses: On the downside, free trade agreements can lead to job losses in certain sectors. Industries that are unable to compete with cheaper foreign goods may need to downsize or close.

Dependency on Other Economies: Lastly, while free trade agreements can bring many benefits, they can also make the Australian economy more dependent on other economies. This can be a risk if there is economic instability in these countries. For example, Australia's economy is heavily dependent on China, which is its largest trading partner. Any economic downturn in China could have significant impacts on the Australian economy.