OK, let’s cut through the crap and bring a few facts to the China Free Trade Agreement debate

OK, let’s cut through the crap and bring a few facts to the China Free Trade Agreement debate

This is a story about biggest economic achievement of the Liberal government since it came power in 2013, at least it is, according to the Liberal government.More importantly, this is a story about why it matters to all of us.And we’re going to break this thing down into 20 easily digestible points and sort the wheat from the ChAFTA (China Free Trade Agreement), so to speak.

1. A free trade agreement (FTA) is an agreement that removes trade barriers between countries. The most common type of barrier is a tariff, which is a tax on imported goods. Tariffs encourage people to consume local goods and services rather than imported ones, whose prices become artificially inflated due to tariffs.

2. But sometimes, it suits two or more countries to do away with tariffs and other barriers to free trade. That’s when FTAs are negotiated.

3. Australia currently is signatory to nine operational FTAs. You can see the list here. We have also signed a tenth, the China Australia Free Trade Agreement, with finer points being debated in parliament this week. It’s controversial in some ways, which we’ll get to in a moment.