Australia-United States Free Trade Agreement Research Articles

Corporate payout policy: does product market competition matter? Evidence from Australia

PurposeThe purpose of this paper is to examine the impact of product market competition on dividend payout and share repurchases in Australia in which a full dividend imputation system has been in place since 1987.Design/methodology/approachPanel data estimation with industry and year-fixed effects is employed to examine the role of industry competition on dividend payout and share repurchases. The paper uses a sample of ASX200 non-financial firms, including 4,272 observations over the period 1992–2015. To address the endogeneity problem, the authors utilize the event of Australia–United States Free Trade Agreement (AUSFTA), which became effective on 01 January 2005, and perform a difference-in-difference analysis.FindingsThe authors find that firms operating in competitive markets are likely to pay more dividends and repurchase more shares to reduce agency costs. The positive relation between industry competition and dividends is stronger among firms where the CEO and the Chairman of the Board are the same person and among firms with higher market-to-book ratio and higher standard deviation of stock returns. The study results are robust when the authors account for the impact of franking credit on dividend payment. In the difference-in-difference analysis, the authors find strong evidence of a casual relation that product competition drives changes in dividend policy.Practical implicationsThe findings are consistent with the notion that intense product market competition can mitigate agency conflicts between managers and shareholders and with the information signalling explanation of market competition. As such, regulators may want to introduce policies that encourage more market competition (e.g. market deregulation) to enhance market efficiency.Originality/valueThis study incorporates product market competition in explaining the firm payout policy.

Are free trade agreements good for the environment? A panel data analysis

AbstractThis study empirically examines the relationship between free trade agreements (FTAs) and greenhouse gas (GHG) emissions. For this purpose, we use three different FTAs: the Southern Common Market, the North American Free Trade Agreement, and the Australia–United States Free Trade Agreement. These FTAs are between developing, both developing and developed, and only developed countries, respectively. Panel unit root, panel cointegration, and fully modified ordinary least squares estimations are employed to examine the long‐run relationship between GHG emissions and trade liberalization. The results indicate that the environmental effects of FTAs depend on the different agreement types. When FTAs are between only developed or developing countries, overall there is no environmental damage, and these types of FTAs can be beneficial for the environmental quality in the long run. However, when developing and developed countries are in a trade agreement, overall environmental quality decreases due to increased GHG emissions.

Are Free Trade Agreements Good for the Environment? A Panel Data Analysis

This study attempts to empirically re-examine the relationship between free trade agreements (FTAs) and greenhouse gas (GHG) emissions. For this aim, we chose three different free trade agreements: Southern Common Market (MERCOSUR), North American Free Trade Agreement (NAFTA), and the Australia-United States Free Trade Agreement (AUSFTA). These FTAs are between developing countries, developed and developing countries, and only developed countries, respectively. Panel unit root, panel cointegration, and fully modified OLS (FMOLS) estimators are employed to find the long-run relationship between GHG emission, trade liberalization, and other economic factors. The results indicate that the environmental effect of a free trade agreement depends on the agreement type. When the agreement is among only developed or only developing countries, there is no environmental damage to the world and these types of FTAs can be beneficial for the world environment. However, when developing and developed countries are in the agreement, world GHG emissions increase.

The economic impact of the Australia–US free trade agreement

The Australia–United States Free Trade Agreement (AUSFTA) came into effect in 2005. It was the second preferential trade agreement that Australia signed, after its agreement with Singapore, and marked a departure from the primacy of Australia's previous trade policy of unilateral and multilateral trade liberalisation toward preferential liberalisation. This paper assesses the economic effects of AUSFTA by applying the Productivity Commission's gravity model of trade from its Bilateral and Regional Trade Agreements review. The evidence reveals AUSFTA resulted in a fall in Australian and US trade with the rest of the world—that the agreement led to trade diversion. Estimates also show that AUSFTA is associated with a reduction in trade between Australia and the United States.

The Economic Impact of the Australia-United States Free Trade Agreement

The Australia‐United States free trade agreement (AUSFTA) came into effect in 2005. It was the second preferential trade agreement that Australia signed, after its agreement with Singapore, and marked a departure from the primacy of Australia’s previous trade policy of unilateral and multilateral trade liberalisation towards preferential liberalisation. This paper assesses the economic effects of AUSFTA by applying the Productivity Commission’s gravity model of trade from its Bilateral and Regional Trade Agreements review. The evidence reveals AUSFTA resulted in a fall in Australian and US trade with the rest of the world — that the agreement led to trade diversion. Estimates also show that AUSFTA is associated with a reduction in trade between Australia and the United States.

Trick Or Treaty?: The Australian Debate Over The Anti-Counterfeiting Trade Agreement 2011

The secretive 2011 Anti-Counterfeiting Trade Agreement – known in short by the catchy acronym ACTA – is a controversial trade pact designed to provide for stronger enforcement of intellectual property rights. The preamble to the treaty reads like pulp fiction – it raises moral panics about piracy, counterfeiting, organised crime, and border security. The agreement contains provisions on civil remedies and criminal offences; copyright law and trademark law; the regulation of the digital environment; and border measures. Memorably, Susan Sell called the international treaty a TRIPS Double-Plus Agreement, because its obligations far exceed those of the World Trade Organization's TRIPS Agreement 1994, and TRIPS-Plus Agreements, such as the Australia-United States Free Trade Agreement 2004. ACTA lacks the language of other international intellectual property agreements, which emphasise the need to balance the protection of intellectual property owners with the wider public interest in access to medicines, human development, and transfer of knowledge and technology.In Australia, there was much controversy both about the form and the substance of ACTA. While the Department of Foreign Affairs and Trade was a partisan supporter of the agreement, a wide range of stakeholders were openly critical.After holding hearings and taking note of the position of the European Parliament and the controversy in the United States, the Joint Standing Committee on Treaties in the Australian Parliament recommended the deferral of ratification of ACTA. This was striking as representatives of all the main parties agreed on the recommendation. The committee was concerned about the lack of transparency, due process, public participation, and substantive analysis of the treaty. There were also reservations about the ambiguity of the treaty text, and its potential implications for the digital economy, innovation and competition, plain packaging of tobacco products, and access to essential medicines. The treaty has provoked much soul-searching as to whether the Trick or Treaty reforms on the international treaty-making process in Australia have been compromised or undermined.Although ACTA stalled in the Australian Parliament, the debate over it is yet to conclude. There have been concerns in Australia and elsewhere that ACTA will be revived as a ‘zombie agreement’. Indeed, in March 2013, the Canadian government introduced a bill to ensure compliance with ACTA. Will it be also resurrected in Australia? Has it already been revived? There are three possibilities. First, the Australian government passed enhanced remedies with respect to piracy, counterfeiting and border measures in a separate piece of legislation – the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). Second, the Department of Foreign Affairs and Trade remains supportive of ACTA. It is possible, after further analysis, that the next Australian Parliament – to be elected in September 2013 – will ratify the treaty. Third, Australia is involved in the Trans-Pacific Partnership negotiations. The government has argued that ACTA should be a template for the Intellectual Property Chapter in the Trans-Pacific Partnership. The United States Trade Representative would prefer a regime even stronger than ACTA.This chapter provides a portrait of the Australian debate over ACTA. It is the account of an interested participant in the policy proceedings. This chapter will first consider the deliberations and recommendations of the Joint Standing Committee on Treaties on ACTA. Second, there was a concern that ACTA had failed to provide appropriate safeguards with respect to civil liberties, human rights, consumer protection and privacy laws. Third, there was a concern about the lack of balance in the treaty’s copyright measures; the definition of piracy is overbroad; the suite of civil remedies, criminal offences and border measures is excessive; and there is a lack of suitable protection for copyright exceptions, limitations and remedies. Fourth, there was a worry that the provisions on trademark law, intermediary liability and counterfeiting could have an adverse impact upon consumer interests, competition policy and innovation in the digital economy. Fifth, there was significant debate about the impact of ACTA on pharmaceutical drugs, access to essential medicines and health-care. Sixth, there was concern over the lobbying by tobacco industries for ACTA – particularly given Australia’s leadership on tobacco control and the plain packaging of tobacco products. Seventh, there were concerns about the operation of border measures in ACTA. Eighth, the Joint Standing Committee on Treaties was concerned about the jurisdiction of the ACTA Committee, and the treaty’s protean nature. Finally, the chapter raises fundamental issues about the relationship between the executive and the Australian Parliament with respect to treaty-making. There is a need to reconsider the efficacy of the Trick or Treaty reforms passed by the Australian Parliament in the 1990s.

Symposium: Australia–US Economic Relations and the Regional Balance of PowerAustralia–US Economic Relations following the 2005 Free Trade Agreement

The Australia–United States Free Trade Agreement (AUSFTA) came into force on 1 January 2005. Australia's exports to the US have since stagnated, while imports into and US investments in Australia have surged. This article analyses Australia–US economic relations with a focus on trade and investment flows. In addition, it examines the capital raising by US investment banks for these projects. The analysis traces the effects on the relationship of the Global Financial Crisis, the resources boom in Australia and the rise of the Australian dollar.澳美自由贸易协定2005年元旦起生效。自那以来，澳大利亚对美出口止步不前，而来自美国的进口和投资却一路上扬。本文考察了澳美经济关系，重点分析了贸易和投资流。此外作者还研究了美国投资银行为那些项目的融资。以往分析研究探索了全球金融危机、澳大利亚起源开发热以及澳大利亚元升值三者之间关系所受的影响。

The Novel as Social Satire: 60 Years Later, The Wind Done Gone and the Limitations of Fair Use

The absence of the doctrine of fair use from Australian copyright law has been a bone of contention in Australia after the Australia-United States Free Trade Agreement (FTA). As the Australian government reformed the Copyright Act 1968 (Cth) in the aftermath of the FTA it eschewed the option of adopting fair use. Instead, Australia chose to incorporate a version of fair use into its existing fair dealing framework. Accordingly, the Copyright Amendment Act 2006 (Cth) inserted ss 41A and 103AA into the Copyright Act. These provisions provide that a fair dealing with a copyright protected work does not constitute an infringement if it is done for the purposes of parody or satire. These provisions codify part of the ratio of the United States Supreme Court in the seminal case of Campbell v Acuff Rose Music. However, the parameters of these new provisions are unexplored and the sparse nature of fair dealing jurisprudence means that the true meaning of the provisions is unclear. Moreover, two cases from the United States, SunTrust Bank v Houghton Mifflin and Salinger v Colting, underline just how important it is to have legal rules that protect literary ‘re-writes’. Both cases involved authors using an original novel to ‘write back’ to the original author and the broader culture. ‘Writing back’ or the ‘re-write’ has a firm basis in literature. It adds something invaluable to our culture. The key question is whether our legal landscape can allow it to flourish. This paper examines the interaction between fair use and literary re-writes.

A Determination Of The Trade Impacts Of The Australia-United States Free Trade Agreement

This paper seeks to determine the impact of the Australia-United States Free Trade Agreement (AUSFTA) on the flow of trade between Australia and the United States. To accomplish this, time series data were gathered for 10 SITC REV. 1(0-9) classifications for the years 1985-2009. These data were then sorted into three sub-classes (by direction of trade flow): 1) U.S. exports for that particular SITC class to Australia, 2) vice versa, and then 3) total trade volume for that particular sub-class between the two nations. These three classifications for each SITC class were then regressed against the explanatory variables of GDP (both Australian/U.S.), Population (both Australian/U.S.), the Relative Exchange Rate (AU$/US$), and a dummy trade agreement variable, AUSFTA. The results suggest that AUSFTA has been a greater trade creation catalyst for Australia than for the United States. In fact, for the United States, a greater level of trade diversion has been the result.

Impact of the Australia—US Free Trade Agreement on Australian Medicines Regulation and Prices

The Australia—United States Free Trade Agreement (AUSFTA) came into force on 1 January 2005. Before and subsequently to the AUSFTA being concluded, controversy surrounded the debate over its impact on Australia's health policy, specifically on regulation of pharmaceutical patents and Australia's cost-effectiveness system relating to prescription medicine prices known as the Pharmaceutical Benefits Scheme (PBS). This article examines the expectations of both parties in the pharmaceutical sector with regard to the AUSFTA, as well as how successfully they were achieved. It seeks to analyse important relevant outcomes for regulators, the public and pharmaceutical industry, as well as lessons about how trade negotiations relating to health and medicines policy should be approached in future. To investigate whether AUSFTA-related regulatory changes may lead to higher medicines prices in Australia, we looked at recent PBS Public Summary Documents to discover examples of PBS-approved FI (patented) drugs, over the period from July 2008 until June 2009, that failed to establish cost-effectiveness over F2 (generic) comparators (with mandated price cuts) and were thence cost-minimised. This period was chosen because the major price effects of the potentially AUSFTA-related National Health Amendment ( Pharmaceuticals Benefits Scheme) Act 2007 (Cth) came into effect from August 2008.

Reference pricing for pharmaceuticals: is the Australia–United States Free Trade Agreement affecting Australia's Pharmaceutical Benefits Scheme?

Amendments to the National Health Act 1953 (Cwlth) were legislated by the Australian federal government in 2007 with minimal public debate. The National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007 includes several changes that will limit reference pricing under the Australian Pharmaceutical Benefits Scheme (PBS). Here, I argue that these amendments were influenced by the Australia–United States Free Trade Agreement (AUSFTA) particularly the Medicines Working Group established under Annex 2C of that agreement. I make the case that such amendments could have adverse consequences, involving the erosion of scientific objectivity and equity in PBS processes. One concern is that the amendments might lead to policy choice being delegated to technical experts in finance, or working groups with private interests, rather than being made part of a systematic public debate about the kind of health care system all Australians want to have, and the trade-offs they are prepared to make against strategic objectives of trade or international public policy.

Advance Australia Fair? The Copyright Reform Process

Since the start of the millennium, the Australian federal government has engaged in repeated reforms of the nation's copyright laws as part of a broader response to the national and international challenges created by the advent of the internet and the wider digital revolution. This reform process has at times been both chaotic and confusing. Substantial amendments enacted in only 2001 to bring Australian copyright law into the digital age were changed substantially in response to the Australia–United States Free Trade Agreement (AUSFTA) of 2004. Concurrent to meeting the obligations created by the AUSFTA, the Australian government also conducted several reviews with a view to introducing new user‐based exceptions to copyright infringement in an attempt to balance Australia's increasingly copyright‐owner‐focused legislation. These changes were enacted as part of the Copyright Amendment Act 2006 (Cth). However, any benefit that these new exceptions created for copyright users and consumers has arguably been outweighed by the implementation of stronger technological protection measures and digital rights management protection and criminal sanctions that have been accompanied by few exceptions for legitimate use. Now, at the end of an often rushed and inadequately debated reform process, few parties are expressing satisfaction with the resulting amendments.

New PBS Reforms—PBS Saviour but at what Cost to Hospitals?

Journal of Pharmacy Practice and ResearchVolume 37, Issue 2 p. 93-94 EditorialFree Access New PBS Reforms—PBS Saviour but at what Cost to Hospitals? Sue Kirsa BPharm, GradDipHospPharm, Corresponding Author Sue Kirsa BPharm, GradDipHospPharm President, SHPA Federal Council, and Director of Pharmacy [email protected] Peter MacCallum Cancer Centre, St Andrews Place, East Melbourne, Vic., 3002Search for more papers by this author Sue Kirsa BPharm, GradDipHospPharm, Corresponding Author Sue Kirsa BPharm, GradDipHospPharm President, SHPA Federal Council, and Director of Pharmacy [email protected] Peter MacCallum Cancer Centre, St Andrews Place, East Melbourne, Vic., 3002Search for more papers by this author First published: 13 April 2015 https://doi.org/10.1002/j.2055-2335.2007.tb00025.xAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat No abstract is available for this article. References 1 Fact Sheet: Pharmaceutical Benefits Scheme (PBS) Reform. Available from <www.health.gov.au/internet/wcms/publishing.nsf/Content/24693658DD49E286CA2572750081DB74/$File/PBS%20Reform%202Feb07.pdf>. 2 Australian Pharmaceutical Advisory Council. National guidelines to achieve the continuum of quality use of medicines between hospital and community. Canberra: Commonwealth Department of Health and Family Services; 1998. 3Harvey KJ, Harris AH, Bulfone L. The National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2007: reform or fracture [editorial]? eMJA Rapid Online Publication; 13 June 2007. 4Faunce TA. Reference pricing for pharmaceuticals: is the Australia-United States Free Trade Agreement affecting Australia's Pharmaceutical Benefits Scheme [viewpoint]? eMJA Rapid Online Publication; 13 June 2007. Volume37, Issue2June 2007Pages 93-94 ReferencesRelatedInformation

Potential impact of AUSFTA on Australiaˈs blood supply

• Australia is largely self-sufficient in its supply of safe, fresh blood products because of the goodwill of non-remunerated, volunteer donors, plus rigorous testing and processing standards. • CSL Limited is the sole provider of plasma fractionation services in Australia, enjoying exclusive rights under the Plasma Fractionation Agreement with the Australian Government. • In the Australia-United States Free Trade Agreement (AUSFTA), Australia agreed to review its current contract with CSL Limited, and to recommend to the states and territories that the process be opened up to overseas tender. • Overseas tenders for off-shore fractionation services are likely to be highly competitive due to their low manufacturing costs and accumulated expertise. • Off-shore fractionation could compromise the safety of Australia's blood supply through delays in processing and transportation, issues related to quality control, and even the siphoning of stock to overseas markets. This could compromise the long-term care of Australian patients and create a serious national security risk in the event of a terrorist attack or natural disaster. • Australia's AUSFTA obligation to recommend changes does not equate to an obligation to actually proceed. The states and territories should carefully consider whether such changes would be in our national interest. • The long-term security of the Australian people in the current security environment is dependent on continuance of an onshore fractionation plant and appropriate back-up facilities.

The assessment of pharmaceuticals for government subsidy in Australia: recent developments

SUMMARYAustralia has a well-developed system for the appraisal of pharmaceuticals and other health technologies. In January 1993, Australia was the world leader with mandatory economic evaluations for the government to consider subsidising pharmaceuticals on the Pharmaceutical Benefits Scheme. At the end of 2006, the Guidelines to sponsors underwent substantial revisions. In addition, other fundamental changes have recently occurred that present new challenges to the Pharmaceutical Benefits Advisory Committee (PBAC); these include the requirement for greater transparency of the PBAC process and appraisals following the Australia-United States Free Trade Agreement, and the appraisal of vaccines by the PBAC.This editorial describes some recent developments and their key features in the appraisal of pharmaceuticals in Australia. The PBAC standards and technical requirements seem to have lost ground on the world stage. For example, the lack of a reference case and absence of probabilistic sensitivity analysis requirements have hindered the ability to make judgements on the relative value for money of new pharmaceuticals. Thus, the guidelines do not go far enough to advance standards for best practice. A better approach may have been to specify an objective list of criteria for judging the quality of submissions. Nevertheless, this latest (2006) revision to the PBAC guidelines is a highly useful and comprehensive guide on health technology assessment.

Australian Wine Exports and the AUSFTA

Abstarct Using data from the Australian Wine and Brandy Corporation, this paper explores the potential effect of the Australia–United States Free Trade Agreement (AUSFTA) on Australian wine exports to the United States. Specifically, it examines the relationship between the Australian–US real exchange rate, and wine sales of nine different categories of Australian wine exports between 1990 and 2004. The analysis indicates that sales of mid-valued red wine, white wine and sparkling wines are more sensitive to changes in price than other types of wine. This suggests that AUSFTA is likely to generate a larger proportional impact on sales of these wines than other varieties.

Intellectual Property Rights: Governing Cultural and Educational Futures

This article uses Nikolas Rose's theory of governmentality to examine ways in which intellectual property is imbricated in a broad spectrum of globalised and globalising discourses. Using the 2004 Australia–United States Free Trade Agreement as a case in point, it shows how discourses of culture, trade, foreign policy, and security intersect and potentially restrict access to cultural knowledge and textual resources for young people and educators.

The Australia-United States Free Trade Agreement: An economic evaluation

A bilateral Free Trade Agreement (FTA) between Australia and the United States came into effect on 1st January 2005. Since the U.S. is one of the main trading partners for Australia, it was anticipated that the FTA would bring a substantial increase in Australia's bilateral trade with the United States. It would also have important implications for Australia's other main trading partners such as Japan, and China. This paper seeks to provide a quantitative assessment of the impact of the FTA by undertaking simulations using the Global Trade Analysis Project (GTAP) model. By simulating the GTAP multi-country CGE model, the paper evaluates various economy-wide effects, sectoral level effects, and trade diversion and trade creation effects in the two countries in response to bilateral free trade. It will also identify the effects on trading partners outside the FTA. The results will provide a preliminary indication of the magnitude of welfare gains involved.

Potential impact of AUSFTA on Australia's blood supply

Australia is largely self-sufficient in its supply of safe, fresh blood products because of the goodwill of non-remunerated, volunteer donors, plus rigorous testing and processing standards. CSL Limited is the sole provider of plasma fractionation services in Australia, enjoying exclusive rights under the Plasma Fractionation Agreement with the Australian Government. In the Australia-United States Free Trade Agreement (AUSFTA), Australia agreed to review its current contract with CSL Limited, and to recommend to the states and territories that the process be opened up to overseas tender. Overseas tenders for off-shore fractionation services are likely to be highly competitive due to their low manufacturing costs and accumulated expertise. Off-shore fractionation could compromise the safety of Australia's blood supply through delays in processing and transportation, issues related to quality control, and even the siphoning of stock to overseas markets. This could compromise the long-term care of Australian patients and create a serious national security risk in the event of a terrorist attack or natural disaster. Australia's AUSFTA obligation to recommend changes does not equate to an obligation to actually proceed. The states and territories should carefully consider whether such changes would be in our national interest. The long-term security of the Australian people in the current security environment is dependent on continuance of an on-shore fractionation plant and appropriate back-up facilities.

Free trade in mad cows: how to kill a beef industry

Australia is the world's second largest beef exporter, dominating the highest value beef markets of Japan and Korea. Australia's competitiveness is underpinned primarily by its freedom from Bovine Spongiform Encephalopathy (BSE)—better known as ‘Mad Cow’ disease—thanks to strict animal feeding and importation regulations adopted in 1966. Why then would the Australian beef industry appear to agree to soften prohibitions on beef imports from BSE-affected countries, which would have the effect of opening Australia to BSE and potentially destroying its BSE-free status, along with its prime Asian markets? Our analysis begins with commitments that appear to have been made under the Australia–United States Free Trade Agreement. If our interpretation is correct, these commitments would compel Australia to accommodate US trade goals by recognising and adopting the weaker international standards on meat trade. To understand why the US would want Australia to abandon its stringent BSE safeguards, we consider wider US policy on BSE and beef exports, and its strategy for re-entering the valuable Japanese and Korean markets. To explain why the Australian beef industry might allow its interests to be sacrificed to serve US trade goals, we examine institutional and ownership features of the industry. Government pre-emption or ‘capture’, we suggest, explains industry subservience. The apparent willingness of the Australian government to sideline its country's economic interests in order to serve those of a foreign power raises the question of Australian exceptionalism.