The Australian US Free Trade Agreement (AUSFAT) became operational from 1 January 2005 (eventually signed in May 2004). While heralded at the time as a great economic outcome for both countries by respective governments and ‘sold' publicly on the perceived economic benefits of a report commissioned by the Australian Department of Foreign Affairs and Trade (DFAT), Australia's main interests in clinching a trade deal with the US had more to do with non-economic factors (e.g. security, political and foreign policy objectives). While inevitable to many it has the associated dangers that economic considerations will be inappropriately traded off for non-economic goals. Australia 's past economic prosperity has rested substantially on significant reforms to the economy based on unilateral trade liberalization that successfully separated the economic gains from political and foreign policy factors. Australia signed AUSFTA, despite some major reservations held by the Trade Minister and the Australian negotiators over the US 's insistence to exclude sugar, following the last minute direction of the former Prime Minister, reflecting political rather than economic considerations. Moreover, the perceived economic benefits to Australia were questioned at the time by several Australian commentators, with the DFAT-commissioned report severely criticized and the magnitude of the official estimated economic benefits rejected by further studies available after the “deal was done.” USFTA was an important watershed in Australia 's trade policy. It signaled the change in Australia 's trade policy towards FTAs in 2000 when cabinet agreed to negotiate an FTA with the US . As with many other countries FTAs are fashionable and Australia , despite previously being one of the major resistors of such an approach in favour of unilateralism and multilateralism. For a start, FTAs are not free trade areas but rather preferential or discriminatory trade arrangements, and hence run counter to multilateralism (despite the often repeated rhetoric that they are complementary) and more alarmingly to unilateral liberalization. Thus, it is important to examine more closely the purported economic benefits to Australia of AUSFTA. The objective of this article is to do so looking at services, an important component of AUSFTA and of ever expanding significance globally and to both countries in terms of trade but more importantly to their own economic performance. It does this not by proposing new empirical evidence but examining past studies and trying to place the gains from negotiated forms of liberalization, especially from FTAs but also multilateral agreements, in their correct economic perspective. It thus tries to re-balance the importance of unilateral trade-related reforms for Australia 's future economic performance, something lost in recent years in public policy and urgently in need of being re-invigorated.