Overview of Australia’s Major FTAs (China, India, Japan, Korea, UK, etc.)
Australia has entered a web of FTAs over the past two decades, covering most of its major trading partners. Key agreements include those with China (ChAFTA, in force since 2015), Japan (JAEPA, 2015), South Korea (KAFTA, 2014), and the United States (AUSFTA, 2005). More recently, Australia signed deals with Indonesia (IA-CEPA, 2020), the United Kingdom (A-UKFTA, entered into force 2022), and an interim pact with India (AI-ECTA, 2022), with negotiations ongoing for a fuller agreement. Australia is also part of broader regional pacts like the CPTPP and RCEP, linking it to Vietnam, Malaysia, and other ASEAN economies. These FTAs aim to reduce tariffs and other barriers, enhancing economic integration. They have indeed yielded sizable boosts in trade and investment. For instance, following the China-Australia FTA, Chinese direct investment into Australia surged. Inflows jumped from about $5.7 billion in 2014 to $10.9 billion in 2015 and $14.9 billion in 2016, before stabilising.4
Similarly, tariff cuts under the Japan and Korea FTAs saw Australian exports (like beef and wine) climb in those markets. In parallel, people-to-people ties have grown. The UK FTA included provisions to ease working holiday visas, and the Australia-India agreement opened doors for skilled professionals and students. In short, Australia’s major FTAs have not only reshaped trade balances but also facilitated greater movement of capital and individuals. These are conditions under which one might expect international money transfers, whether for family support, education, or business transactions, to also flourish.
Analysis of IMT Flows Before and After Key FTAs
To gauge the impact of FTAs on money transfer flows, it helps to compare patterns before and after these agreements. A clear finding is that pre-existing migration links often drive IMT volumes more than trade policy does. But, when an agreement promotes the movement of skilled professionals and students (like India), this goes to further the migration links and thus remittances.
Take the Australia-China corridor: even before ChAFTA in 2015, remittances and transfers between the two countries were substantial, reflecting a growing Chinese-Australian community and business relations. After the FTA, official trade exploded, and while personal remittances also grew, it was not to the same extent. Based on our own remittances research and data from the World Bank, Australia sent a substantial US$3.5bn to China in 2024. However, this growth was evident before 2015 as well, thanks to an influx of Chinese students and migrants in the early 2010s.
Australia’s Population by Country of Birth (2014/2019/2024)
India, which had no comprehensive FTA until 2022, steadily became one of the top recipients of money outflows from Australia due to growing migration. In 2019, before any trade deal was in effect, an estimated 11.5% of Australia’s outbound remittances went to India, second only to China at the time. India became the top remittance destination from Australia in 2024 due to its significant diaspora (roughly a third larger than that of China), but migration increased by similar levels from 2014 to 2019 (pre-FTA) as it did from 2019 to 2024. Now that a limited FTA with India has commenced (and a broader one is on the horizon), it may further stimulate business and investment transfers, but the baseline of people-driven flows was already high.
For other FTA partners, the pattern is similar: if a country had a sizable diaspora or student population in Australia, remittance flows were high regardless of an FTA. Australia’s free trade deals with Japan and Korea in 2014-2015, for example, did not produce a notable jump in personal transfers with those countries, largely because migrant communities from Japan and Korea in Australia remain relatively small.
Thus, having an FTA with a country doesn’t automatically create a remittance corridor. For instance, Australia’s FTA with Chile (in force since 2009) did little to spark money transfers between the two, simply because the communities and business exchanges are small. Similarly, an FTA with a wealthy nation like Singapore (2003), while it deepened investment ties, hasn’t resulted in notable personal remittance flows; Singapore isn’t a country where migrants send money to struggling families, given its high income level (transfers with Singapore are mostly corporate or high-net-worth flows).
In summary, where FTAs do coincide with jumps in IMTs, it often relates to indirect factors. For instance, an FTA spurring investment projects that require moving funds, or encouraging migration through work-study provisions.
Migration and Investment: Hidden Drivers of Remittance
FTAs don’t directly govern, but certainly influence migration and investment. Australia’s experience confirms a simple truth: people move money. Countries that have supplied large numbers of immigrants to Australia or attracted Australian expats tend to be the same countries involved in heavy remittance exchange. Nearly 29-30% of Australia’s population was foreign-born throughout the late 2010s, and these communities sustain family ties across borders.5
Top 6 Countries by Foreign-Born Population (Tariff Removals & Remittance Volumes)
| Country | Foreign Born Population | Outbound Remittances in 2024 (USD – millions) | Estimated Tariff Elimination | Average Amount Sent Per Migrant (USD) | |
|---|---|---|---|---|---|
 | United Kingdom | 1,143,440 | 966.2 | Over 99% | 845 |
 | India | 845,800 | 4814.6 | 90% | 5,692 |
 | China | 655,760 | 3557.4 | 95% | 5,425 |
 | New Zealand | 598,090 | 250.4 | 100% | 419 |
 | Philippines | 361,860 | 1182.8 | 90% | 3,269 |
 | Vietnam | 298,960 | 1524.3 | 90% | 5,099 |
Australia does not have bilateral FTAs with the Philippines and Vietnam, and neither was a primary focus of Australia’s trade policy until unilateral agreements (implemented in 2019) removed tariffs on an estimated 90% of goods and services. However, remittances to these countries were already high prior to these recent unilateral pacts. The explanation again lies in people. There are sizable Filipino and Vietnamese communities in Australia. Many came as migrants decades ago (in Vietnam’s case, starting with post-war refugees and now increasingly students and skilled workers). They maintain familial and economic links back home, sending money for everything from household support to small business investment. These flows have grown over time organically, prior to a trade agreement pushing them. This underlines a key point: FTAs are not a prerequisite for vibrant remittance corridors. Cultural and family ties, as well as labor mobility (nurses, engineers, students moving to Australia), have been sufficient to create large and steady IMT flows to non-FTA countries.
Migration creates networks of obligation and support (for example, paying for a parent’s medical bills back home or gifting money at weddings), which manifest as remittance flows. It also creates business networks that ease investment. Investment is another driver: when Australians invest or do business abroad, or foreigners invest in Australia, money transfers follow. FTAs often include investment chapters to encourage this. After trade deals, one might see more profit repatriation (e.g. a foreign company in Australia sending dividends to its home country, or vice versa). For instance, after ChAFTA took effect, Chinese firms invested heavily in Australian real estate and agriculture; the profits or proceeds from resale of these assets eventually flow back to China, adding to IMTs. Similarly, Australian companies expanding into, say, the UK or New Zealand (long-standing FTA partners) will transfer funds for operations and later bring earnings home. While these are not remittances in the personal sense, they appear in international transfer data captured by agencies like AUSTRAC.
In this sense, it’s worth highlighting that the line between “remittance” and broader financial flows can blur: a parent in India sending money to their student child in Australia, or a small business owner in Australia wiring money to buy supplies in Vietnam both count as international transfers.
Crucially, FTAs can indirectly shape these migration and investment drivers. A trade agreement might include easier visa access for businesspeople or students (for example, Australia’s deal with India increased work-and-holiday visa quotas), thereby increasing migration in certain categories. More trade and investment activity can lead to more expatriate assignments or transnational entrepreneurs. Over time, these factors grow diaspora communities and business ties, which then fuel more two-way money flows.
FTAs and Transaction Costs: Have They Helped?
Free trade agreements primarily tackle tariffs on goods and market access for services. They do not usually address the fees or friction of sending money. However, one might wonder if the broader cooperation brought by FTAs has helped reduce transaction costs for remittances between Australia and its partners.
The ACCC (Australia’s competition authority) reported in 2024 that for the Australian dollar equivalent of US$200, Australia’s average cost of an IMT declined from 8.1% in the quarter ending 30 December 2018 to 5.72% in the quarter ending 30 September 2023. This is now below the average global cost of a local currency equivalent value of a US$200 IMT, which was 6.18% in the quarter ending 30 September 2023.6
Comparing the Cost of Sending A$250 to the US, UK and Philippines
As demonstrated above, we are seeing a fintech revolution in remittances in Australia: non-bank operators and online platforms have been growing their market share, offering significantly lower fees than money transfers with traditional Aussie banks. But are these fintechs being aided by FTAs?
We haven’t seen FTAs directly mandate lower remittance fees. The cost of sending money appears to depend more on competition and other factors such as banking infrastructure, currency convertibility, and regulatory requirements (e.g. anti-money laundering checks), which typically fall outside the scope of trade agreements.
Take the UK-Australia example: the A-UKFTA includes provisions for closer regulatory cooperation in financial services, yet fintechs still require separate licensing to operate in each country. In most cases, IMT providers from the UK expanded into Australia well before the FTA came into effect in 2023 anyway.
There is also cooperation outside of FTAs aimed at reducing remittance costs. Australian regulators (AUSTRAC, RBA) and DFAT have launched joint initiatives, and both the World Bank and G20 nations are committed to lowering the cost of international money transfers. It has also become easier for users to find the cheapest provider for specific transfer routes and sizes, thanks to a growing number of resources like our own money transfer comparison tool.
Do FTAs Deliver Balanced Benefits?
FTAs are often sold as win-win, but there can be perceptions of imbalance and remittance patterns feed those narratives. For example, a great deal of money flows out of Australia to China each year through personal transfers. Does this represent an unequal exchange favoring China? On the surface, one might think so: Australian dollars earned onshore are sent offshore and are a loss to the local economy. Indeed, critics of ChAFTA a decade ago argued it would advance China’s strategic interests at Australia’s expense, hinting that benefits might not be evenly shared.7
However, a closer look provides a more nuanced picture. Yes, China receives far more in remittances from Australia than vice versa, but China is also Australia’s largest trading partner and a major source of foreign students and tourists. Australia has earned tens of billions in exports of education and services to Chinese consumers. This reciprocal flow complicates any narrative of one-way benefit.
With all that said, imbalances certainly exist in personal remittances (ignoring trade revenues). Australia consistently sends out far more than it receives: outflows were about $7.4 billion vs. $1.75 billion inflows in 2019 (roughly 0.3% of GDP).8
Politically, large outflows to certain countries can raise eyebrows. For instance, with $3.5 billion in remittances being sent to China in 2024, some commentators might question if the FTA-enabled integration is resulting in capital leakage. However, those hard-earned wages that migrants choose to send to loved ones, can in turn boost goodwill and development abroad. From a foreign policy angle, Australia might actually gain soft power by being a source of remittances that improve lives in partner countries. Remittance outflows to one country could be seen as part of a larger exchange where Australia gets other benefits (like access to that country’s market or labor).
Nonetheless, there can be controversial viewpoints. Some worry that large outflows mean domestic money not being spent locally, potentially dampening consumer demand.
Future Outlook: The Role of Upcoming FTAs
Looking ahead, Australia’s roster of FTAs is still expanding, and with it the landscape of international money transfers will evolve. One major deal on the horizon is the Australia-EU Free Trade Agreement, which is under negotiation.
The upcoming Australia-EU FTA could support financial services and migration links, facilitating new flows to and from Europe. Likewise, India’s CECA could expand on ECTA by improving mobility and harmonising financial regulation, thereby easing transfers. If Australian banks partner with Indian fintech firms as a result of closer ties, sending money between the two countries might become faster and cheaper. We can expect remittance volumes to India to keep rising as the community grows.
Politically, remittances could gain more prominence in FTA discussions. With the G20 and international bodies emphasizing the importance of reducing remittance costs, future FTAs might at least acknowledge this objective. We might imagine clauses that commit countries to cooperate on financial inclusion or remittance transparency. Already, Australia in its G20 National Remittance Plans committed to improve price disclosure and competition in the IMT market.9
Summing Up
In summary, migration and investment are the engines behind remittance flows. FTAs, by enhancing economic linkages, can stoke these engines, but they are one factor among many. Immigration policy, relative economic opportunity, and community networks often play a larger role in determining how much money flows between two countries outside of trade. Australia’s largest remittance corridors are in many cases a byproduct of its multicultural society and investor-friendly economy, rather than direct outcomes of trade agreements.
Sources:
- Australian Bureau of Statistics – Australia’s population by country of birth, 2024
- World Bank – Migration and Remittances Data (via G20 Remittance Plan 2021)
- Money Transfer Australia – Remittance Winners and Losers, 2025
- AUSTRAC – International Funds Transfer Instruction (IFTI) reports data (AUSTRAC Risk Assessment 2022)
- Department of Foreign Affairs and Trade – China-Australia Free Trade Agreement outcome
- Reserve Bank of Australia – various inputs on payments system and foreign investment,
- International Monetary Fund – Balance of Payments statistics (via World Bank/ABS data on remittances)
- Australian Competition & Consumer Commission – FX inquiry and IMT price transparency report (2024 Update)