Economic theory suggests that bilateral agreements such as the free trade agreement will lead to the creation of trade between the parties directly concerned, but that they will also lead to trade diversions from third countries, thus offsetting possible benefits. Bilateral agreements can also undermine multilateral agreements related to the World Trade Organization. Partly because of these factors, the utility estimates made by the CIE and cited by the government have been challenged by most economists who have contributed to this issue in Senate committees, some of whom have concluded that the agreement would reduce Australia`s economic well-being. The government relied on estimates of the economic benefits of the free trade agreement, calculated by the Centre for International Economics, an advisory group. The leading group that supported the free trade agreement was called Austa. Austa`s arguments have focused on the dynamic benefits of integration into the U.S. economy. It was only in early 2001, after the election of George W. Bush in the United States and with John Howard in power in Australia, that an Australia-United States.
The FTA eventually took shape. In April 2001, President Bush expressed interest in a free trade agreement with Australia, provided “everything is on the table.” In 2004, the Australian Department of Foreign Affairs and Trade commissioned a private consulting firm – the Centre for International Economics (CIE) – to model the economic impact of such an agreement. Negotiations on the free trade agreement began in March 2003 and, after six rounds of negotiations in Canberra, Hawaii and Washington, D.C., the text was finally adopted in February 2004 and signed in May 2004 in Washington by Australian Trade Minister Mark Vaile and Robert Zoellick, US Trade Representative. Finally, the chapter established a Committee on Trade in Goods, which should provide for an arbitration procedure for each country to “deal with issues relating to tariffs, non-tariff measures, rules of origin and customs administration”. The agreement requires the legal enforcement of digital rights management systems, but an Australian legislative committee has published a report finding that this part of the treaty has a “serious mistake”: while the agreement provides for permitted waivers allowing the use of equipment to circumvent copyright access, it also prohibits access to tools: used for such circumvention. The report still calls it a “deplorable and inexcusable mistake”, a “monstrous mistake” and even a “mistake that borders on absurdity”. The Committee considered that the Government had to find a solution to the error before implementing this part of the treaty.  On March 3, 2004, the USTR released the draft texts of the U.S.-Australia Free Trade Agreement. . . .