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These free trade deals aren't very free... and are quite expensive to set up and manage. Also, trade diversion does mean that we may be investing our resources in the wrong area. To give an example, under free trade Australia (probably) wouldn't produce cars. With the recent deal struck with Thailand, our car production will go up. Australia will move resources from efficient areas into (inefficient) car production because one country has said they will temporarily accept our cars over other cars. When we take the next step towards free trade... a bigger adjustment is necessary in the car industry. It's sorta the same as having a 100% tax on Fords and 0% tax on Holdens. It would be preferable (from an economic efficiency standpont) to have a 50% tax on both - and thus not distort consumer choice. Having said that, I'm marginally in favour of continued bilateral trade negotiations for several reasons - such as the political economy benefits and the fact that it is a tax cut. Though I'm much more strongly in favour of unilateral trade liberalisation.
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