Thailand Law Journal 2009 Fall Issue 2 Volume 12

The graph above presents the impact of TAFTA when the Agreement is immediately come in to force. It can be seen that the real consumption of Australia and Thailand will increase to 4.9 and 14.3 US$ billion respectively. Australian GDP will increase to 6.6 US billion and Thai GDP will rise to 25.2 US billion. It can imply from the graph that both Thailand and Australia will receive the advantageous of TAFTA when the Agreement is immediately implemented. In addition, the Centre went on to study impact from TAFTA in long term benefit. The impact, in long period, on the Australia is provided in the graph below that is generated from the four simulations;

1.  immediate liberalisation of Australia-Thailand trade ?overnight? in 2003 so that the free trade agreement was fully operational in that year. 
2.  liberalisation by both Australia and Thailand over 5 years (2003-2007).
3.  liberalisation by Australia over 3 years (2003-2005) and by Thailand over 8 years (2003-2010).
4.  liberalisation by Australia over 5 years (2003-2007) and by Thailand over 10 years (2003-2012).

The Impact of Phasing: Australia Net present value 2002 US$ billion a Over 20 years and at model determined interest rates. Source: Centre for International Economic

From the From the graph, the benefit of TAFTA for Australia is predicted by the mode that Australian real consumption will be estimated at 4.9 US$ billions since the immediate introduction of TAFTA until the reduction of tariff of both countries at the year tenth of Agreement. Accordingly, the Australian GDP may be at 6.6 US$ billions from the beginning of TAFTA and the GDP will be approximately stable between 6.6-6.8 at the year tenth of TAFTA.

The impact of the Agreement, however, contributes to different trend for Thai real consumption and GDP. Thai real consumption will increase to 14.3 and it will gradually decrease to 11.6, 9.8 and 8.75 US$ billions during the period of liberalisation from the Agreement.

The Impact of Phasing: Thailand Net present value 2002 US$ billiona a Over 20 years and at model determined interest rates. Source: Centre for International Economics

This article is published with the kind permission of Pornchai Wisuttisak, current PhD candidate, School of Business Law and Taxation, ASB, University of New South Wales, Master of Commercial Law, Macquarie University, BA, Political Science, Thammasat University, Thailand. This article originally appeared in the Thailand and Australia Free trade agreement (TAFTA): The advantage pace of foreign investment of both countries.