Essentially, FTAs are designed to r

Essentially, FTAs are designed to reduce the barriers to trade between two or more countries, which are in place to help protect local markets and industries.Trade barriers typically come in the form of tariffs and trade quotas. One such example is Japan's tariff on Australian beef, which under the new deal will be cut from 38.5 per cent to 19.5 per cent over 18 years.FTAs also cover areas such as government procurement, intellectual property rights, and competition policy.

Lowering trade barriers helps industries access new markets, boosting their reach and the number of people they can sell their products to.FTAs are also ultimately designed to benefit consumers. In theory, increased competition means more products on the shelves and lower prices.

Japanese exporters will see Australian tariffs lowered on electronics, whitegoods and cars, and Australian consumers will see prices lowered as a result.Australian car buyers will be paying about $1,500 less for Japanese vehicles.Prime Minister Tony Abbott said in January that Australia's year-long G20 presidency, which culminates with the November summit in Brisbane, would make "freer trade" one of its priorities.

One of the downsides of FTAs are the ability of powerful economies to impose their will over smaller, developing economies.Most often, this comes in the form of a smaller economy making more concessions than are beneficial in the long term, while the larger economy keeps its trade restrictions in place.

Accusations have also been made in the past that FTAs have been enacted for foreign policy purposes, rather than bilateral economic benefit.Critics also argue that FTAs do not encourage trade liberalisation as effectively as multilateral agreements.Furthermore, critics argue that FTAs simply promote large, competitive trading blocs that could create economic instability.

Agreements are notoriously difficult to negotiate, and often call for laws in two different jurisdictions to align.Investor-state dispute settlement (ISDS) provisions give investors the ability to take governments to an international tribunal if they think there has been a breach in an FTA.Australia has ISDS provisions in four of its FTAs, and 21 of its investment protection and promotion agreements (IPPAs).