Schiff and Winters (2003) emphasized the importance of trade frequency in selecting FTA partners, believing that the complementarity between production and consumption increases the probability of FTA signing. Cheng et al. (2016) analyzed the formation mechanism of FTA from the perspective of global value chain (GVC) and pointed out that comparative advantage is the foundation for the establishment of FTA. Blanchard et al. (2016) found that governments tend to provide tax incentives for imported goods that contain domestic value in FTA decisions. Orefice et al. (2014) pointed out that the larger the volume of GVC transactions between countries, the higher the possibility of establishing FTAs, and the degree of GVC participation affects the depth and breadth of FTAs. Maggi et al. (1998) and Maggi et al. (2007) analyzed the impact of domestic political environment and policies on trade behavior and degree of liberalization. Trade liberalization facilitates resource flow, meets the needs of interest groups, and brings economic and political benefits to the government. The empirical study by Lim ã o and Tovar (2011) shows that the government's domestic negotiation ability and relationship with interest groups have a significant impact on resource allocation and foreign trade processes. This article reviews the current situation of FTA in Australia, analyzes the impact of FTA on the Australian economy, and explores the development direction of Australia's FTA strategy from the perspectives of political environment and international strategy, providing reference for future economic and trade cooperation between China and Australia.

1. Australia's Free Trade Agreement

Australia reduces trade barriers and promotes the interests of exporters, importers, producers, and investors through free trade agreements (FTAs). Since 1983, Australia has signed 18 FTAs and preferential trade arrangements with 13 countries and 4 regions. These agreements not only promote economic and trade exchanges, but also have strategic significance, especially in cooperation with countries in the Asia Pacific region. For example, the FTA with New Zealand is Australia's earliest bilateral agreement, the FTA with Singapore improves market access for service exporters, the FTA with the United States exempts over 97% of non-agricultural exports, the FTA with Thailand increases export opportunities in Southeast Asia, the FTA with Chile eliminates all tariffs except for sugar, the FTA with South Korea eliminates tariffs on various agricultural products and resources, energy, and finished products, the agreement with Japan enhances economic complementarity, the FTA with China enhances market competitiveness, the FTA with Peru opens the gateway to Latin America, the agreement with Indonesia has strategic significance, the agreement with India provides broader market access, and the FTA with the United Kingdom promotes two-way investment. The Regional Comprehensive Economic Partnership (RCEP) provides cost advantages and trade efficiency for Australian exporters. The FTAs currently under negotiation include agreements with the European Union, the Gulf Cooperation Council, the Pacific Union, and the service industry. Negotiations with the European Union have been relatively smooth, but face challenges such as agricultural disputes.

The Economic Effects of Australia's FTA

In depth exploration of the economic effects of the Australian Free Trade Agreement (FTA), including improvements in trade conditions and social welfare, the impact of tariff reduction schedules on economic effects, and the specific effects of FTA on Australian trade and investment. By analyzing data from the WITS Country Trade Database, the chapter reveals the economic and trade network between Australia and different countries and regions, highlighting the position of mainland China as Australia's largest trading partner. At the same time, the chapter also discusses Australia's centrality in Asia Pacific trade and its growing trade links with the Asian market.

3 Non economic considerations of Australia's FTA

Australia's FTA strategy is influenced by political diplomacy and energy security in non economic considerations. Australia's FTA strategy in the Asia Pacific region aims to maintain economic and trade relations with China while also considering its political alliance with the United States, demonstrating a dual role of following the United States and actively participating. Australia's' Indo Pacific strategy 'reflects its reliance on US foreign policy and political emphasis on FTAs with India, ASEAN countries, Japan, and South Korea. Australia's' balanced diplomacy 'is unbalanced, with geopolitical considerations taking priority over geo economics, and the China Australia partnership lagging behind the Australia US alliance. The trade agreement negotiations between Australia and the EU and the UK are progressing smoothly, but the suspension of the submarine contract with France has affected the trade negotiations with the EU. Australia actively seeks trade agreements with Gulf countries to obtain energy resources, especially the potential for hydrogen energy development.

4 Conclusion and Implications

Australia's free trade zone strategy and economic and trade investment exchanges are developing in the same direction, with the Asia Pacific region being the focus of its FTA layout. The Australian FTA strategy not only serves political and economic goals, but also involves resource acquisition and energy security. Australia will prioritize promoting bilateral and regional FTAs in the Asia Pacific region, while strengthening negotiations with the European Union and the United Kingdom, despite facing political and economic complexities. Australia is also considering signing FTAs with Latin American and Gulf countries, particularly in terms of energy related provisions. The China Australia Free Trade Area is part of bilateral relations, but political and diplomatic imbalances have a negative impact on economic and trade exchanges. Australia needs to recognize the possibility of China seeking alternative solutions and should not rely solely on FTA to ensure smooth economic and trade relations.