‘It is perfectly possible for a nation to secure sustainable development –in the sense of not depleting its own stock of capital assets – at the cost of procuring unsustainable development in another country’ (Pearceand Warford, 1993). This quote serves to remind us that a nation’s sustainable development achieved at the expense of environmental degradation in another nationis not true sustainable development. This chapter aims to investigate the impacts of trade liberalization on Australia’s ecosystem using a macroeconomic analysis of environmental utilization, and providing policy options available to protect the natural resources in Australia. Such a strategy allows natural resources to realize its full economic potential (whilst being maintained in a closed-loop arrangement) and offers recognition to the ecosystem as an essential player in sustainable trade development. Using an empirical approach, this chapter offers an explanation of the utilization of Australia’s environmental capital and trade (exports and imports) trends with South Korea (FTA partner), as well as contrasting the observed relationship with South Korea. The chapter makes the case that while the expected outcomes from FTA agreement with South Korea will benefit the Australian economy, it is highly recommended that there be initiatives in place to ensure that trade will be just as beneficial to Australia’s environment. Should free trade result in environmental degradation, the anticipated outcomes will not be a true representation of the benefits from free trade. Although the study is based on historical data from 1996 to 2013, it seeks to establish a relationship for Australia’s environmental utilization and trade trends with South Korea and offers a prediction during the FTA tenure.