Chapter 2 of the Free Trade Agreement sets out the conditions of the nature of non-discrimination. Some types of goods are immediately fully applicable to the contract and some are imported over a one-year period or a period of temporary application. On November 13, 2002, the U.S. Trade Representative informed the U.S. Congress of his intention to negotiate a free trade agreement with Australia. Negotiations began in March 2003 and were reached by agreement on 8 February 2004. On February 13, 2004, the President announced to Congress his intention to join the U.S.-Australia Free Trade Agreement. The draft agreements were presented on 3 March 2004. The U.S.-Australia Free Trade Agreement was signed on May 18, 2004. In the United States, the free trade agreement improved the overall trade deficit and generated a trade surplus with Australia, which increased by 31.7% in the first quarter of 2005 compared to the same period in 2004.
U.S. exports to Australia increased by 11.7% in the first quarter of 2005 to nearly $3.7 billion. Agricultural exports to Australia increased by 20%. [Citation required] Special tariff quotas are part of the agreement. These quotas allow Australian producers to export larger quantities of these products to the United States duty-free during the duty elimination period. The following agricultural products are indicated: economic theory suggests that bilateral agreements such as the free trade agreement lead to the creation of trade between the parties directly concerned, but also to a reorientation of trade outside third countries and compensation for potential benefits. Bilateral agreements can also undermine multilateral agreements related to the World Trade Organization. Partly because of these factors, the estimates of benefits produced by the ICE and used by the government have been challenged by most economists who have engaged in Senate committees that have looked at the issue, some of whom have concluded that the agreement would reduce Australia`s economic well-being. Free trade agreements provide a mechanism to facilitate trade in goods. Each agreement contains information and links to legislation, guidelines and opinions on rules of origin and access to preferential rates.
According to the Australian Department of Foreign Affairs and Trade, the trade imbalance between the United States and Australia increased significantly in 2007. The United States has become Australia`s largest source of imports, with more than AUD 31 billion in goods and services. However, Australia`s exports to the United States reached only $15.8 billion.  The real benefits of the agreement are not clear. It was not until early 2001, after the election of George W. Bush in the United States and with John Howard in power in Australia, that he became an Australia-USA. The ATF has finally taken shape. In April 2001, President Bush expressed interest in a free trade agreement with Australia, provided that “everything is on the table.” In 2004, the Australian Department of Foreign Affairs and Trade commissioned a private consulting firm – the Centre for International Economics (CIE) – to model the economic impact of such an agreement.
Negotiations on the Free Trade Agreement began in March 2003 and, after six rounds of negotiations in Canberra, Hawaii and Washington, D.C, the text was finally adopted in February 2004 and signed in May 2004 in Washington by Australian Trade Minister Mark Vaile and U.S. Trade Representative Robert Zoellick. Latham reacted unexpectedly by subordinating laboratory support to the free trade agreement to an amendment that would protect PBS.  This effectively turned the situation around to Howard: if the government rejected the amendment as unnecessary, it opened up to assertions that it does not protect Australian interests; while he supported the amendment, he tacitly acknowledged that the initial terms of the agreement were insufficient.