6 Apr 2010 report
A CIE study into the potential economic impacts arising from Australia and India liberalising all bilateral trade and foreign direct investment has recently been released. This substantial project, undertaken for the Australian Department of Foreign Affairs and Trade, saw use of a leading edge CGE model of the global economy — CIE-GCubed — to quantify the macroeconomic and sectoral impacts of Australia and India entering into a comprehensive trade and investment agreement. Barriers to merchandise trade, services trade and foreign direct investment were quantified; with the modelling incorporating the so-called ‘dynamic productivity’ gains arising from increased trade and investment.
The economic modelling suggests that a comprehensive trade and investment agreement could see Australia’s GDP being higher by around 0.20 per cent over the longer term, and around 0.15 per cent higher in the case of India. Australia’s GDP gains were estimated to amount to some A$43 billion over 2010 to 2030, with India’s GDP gains amounting to A$46 billion.
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