Logic of an Australia-South Africa FTA

Abstract

Australia, previously a strong supporter of multilateral trade liberalisation, recently began negotiating a series of free trade agreements with countries in the Asia-Pacific region. This paper explores, at a conceptual level, the question of whether there is an argument for expanding the geographical scope of these negotiations to include a link to our neighbouring southern continent of Africa. The argument involves a development of the ‘hub-and-spoke’ framework to indicate that a ‘hub-to-hub’ agreement between Australia and South Africa would bring benefits both in terms of increased bilateral trade, and provide strategic advantages through enhanced investment and intra-industry trade.