Free Trade or simply Free?

Free Trade or simply Free?

Is the chest beating and plumage preening about and over the Free Trade Agreement a bit of a joke?

Parliamentary Secretary to the Prime Minister, Josh Frydenberg, said the deal to be signed today with China could be worth (note the word ‘could’) up to $18 billion to the Australian economy over the next few years.  I think he actually said 10 years.  If that’s the case, it’s worth $1.8 billion per year.

Let’s put that into context.  Our total annual iron ore exports are 600 million tonnes.  At US$80/tonne, the total value is A$56 billion.  The total value of the FTA could be wiped out by a US$2.79/tonne move in the iron ore price.

The full terms of the deal are expected to be signed this afternoon and the details released then also. Stay tuned.


Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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  1. Roger, thank you for pointing out the facts so very clearly. The bulk of the Australian people will think it is an outstanding achievement. It’s all hype and political rhetoric.

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