FREE trade agreements are a waste of time, the Productivity Commission says.
A Productivity Commission presentation to the Australian Bureau of Agriculture and Resource Economics and Sciences Outlook conference in Canberra last week said the benefits of FTAs were oversold and that the agreements created unrealistic expectations.
Productivity Commission's Patricia Scott said FTAs resulted in only small increases in national income and that better gains were made through unilateral action.
A recent Productivity Commission report argued Australia should still pursue good outcomes at Doha trade negotiations, but Australia should only agree to an FTA where there would be "significant net economic benefit".
"The National Farmers' Federation said it supported FTAs but the Australian Chamber of Commerce and Australian Industry Group said they produced little gain," Ms Scott said.
Trade Minister Dr Craig Emerson said a "universal accord" on trade, such as the Doha Round on global trade liberalisation, was the "best and fairest way to achieve sustainable economic growth".
"However, high-quality bilateral deals are also beneficial as part of the broader move to global trade liberalisation," Dr Emerson said.
Dr Emerson said last year "the quality of the deal" should decide whether Australia signed it. He said there was no point having bilateral FTAs that did not benefit Australia.
Treasury last year advised the Government that bilateral FTAs were "not meeting Australia's needs".
Australia is working on five bilateral FTAs. NFF policy manager Charlie McElhone said that while multilateral agreements were the "main game", "bilateral and regional agreements play an important role".
"More than 300 bilateral agreements have been made or are in process, and if you're not part of that then you're being discriminated against," Mr McElhone said. "For a nation exporting two-thirds of its production, that's not tenable."
New Zealand had shown the benefit of bilateral FTAs by winning good conditions in key markets where Australian farmers paid "quite high tariffs".