Trade liberalisation has a central role in Australia due to its significant contributions to the welfare and economic performance throughout Australia s history. Despite its high level of trade openness, Australia has continued to open up its market through unilateral and multilateral commitments. In this context, trade reform continues to be a focus of policy discussion. In trade policy analysis, computable general equilibrium (CGE) models are widely used due to their economy-wide structure and solid theoretical foundation. To date most of the CGE models are static in nature and focus on the production sector. Those that do possess dynamic structures often give limited or no attention to the life-cycle decisions of households. In order to partially fill in this gap, this thesis is devoted to developing a new dynamic CGE model for Australia based on the lifecycle theory and pioneering CGE models. Apart from multi-industry structure for the production sector, households are differentiated by age and consume leisure as well as goods to obtain utility. These settings help to better explain the decisions of economic agents, especially those of households on consumption, saving and labour supply over their lifetime. In order to parameterise the model, various data sources representing features of the Australian economy are collected and processed. The constructed model is applied to examine three trade issues in Australia. First, by simulating tariff elimination, most of the industries are expected to expand and households are projected to get a welfare gain. Therefore, a further tariff liberalisation should be conducted by Australia. Secondly, the locally optimal reform in terms of welfare gain is calculated using the theory of the steepest ascent tariff reform to quantitatively provide the best route for trade liberalisation. Tariff cut to the imports of metal processing products is found to have a dominant role to obtain the locally optimal reform. Thirdly, trade protection and openness indices of Australia are estimated based on solid theories of trade indices. Generally, it is concluded that the degree of Australian trade liberalisation has increased continuously over time. The ranking for different trade restriction indices obtained from my model differs from that of other relevant studies. The inclusion of leisure in utility of the households and the tariff structure are the main reasons for this result.