The U.S.-Australia Free Trade Agreement.

• Author: Spry, I.C.F.
• Position: 130463915
• Pages: 22(8)

In "How to Kill a Country: Australia's Devastating Trade Deal with the United States", (1) Professors Linda Weiss and John Mathews, with Elizabeth Thurbon, present matters of grave concern in regard to the recently-negotiated U.S.-Australia Free Trade Agreement. They commence with the following summary of U.S. intentions:

"Propose a trade deal with the world's most powerful country, the one with the longest track record of negotiating Free Trade Agreements. This country must be equipped with a strong Congress that insists on debating and approving the country's initial negotiating position (i.e. what it wants from the deal, and what it will not give away). It must also have in place a well-developed system for comprehensively reviewing the agreement prior to Congressional approval. Your partner will thus have clear goals from the outset, and will not settle for anything less. You, on the other hand, should go into the negotiations with minimal preparation, armed only with the misguided belief that you have a 'special relationship' with your negotiating partner, and that your 'best friend and ally' will look after your interest. Forget about getting approval from your Parliament, or establishing a firm negotiating process with major stakeholders. Simply allow the Prime Minister responsible for the deal to sign it, then rush it through Parliament without meaningful public debate. Then cross your fingers and hope for the best. In no time at all, you will have an agreement just like ours: the Australia-U.S. Free Trade Agreement." The authors give many examples of bad outcomes of the negotiations. For instance, in regard to agriculture, they state that Australia will completely open its markets without tariffs, quotas, restrictions and safeguards, but the United States will be entitled to retain many of its tariffs, quotas and enormous subsidies. For example, U.S. beef, dairy and cotton tariffs will remain for eighteen years. Further, "If Australian prices become too competitive against the exchange rate, the United States can slap their tariffs back on, no questions asked."

Certainly this agricultural outcome is unjustifiably one-sided. Therefore it is appropriate to look to other parts of the Agreement, to see whether countervailing benefits are received by Australia.

But in relation to manufacturing the authors set out a similarly pessimistic analysis. They state that on the one hand the Australian market for manufacturers will immediately be ninety-nine per cent open to the U.S. manufacturers, that Australia will abolish all procurement-linked industry development and "buy national" programmes and that U.S. firms will have unfettered access to the Australian government procurement market. But on the other hand the United States will keep a number of its manufacturing trade barriers in place including a ban on the import of Australia's highly competitive fast ferries and complex rules of origin laws for Australian manufacturers, including textiles and automobiles. Also the United States will be able to set aside procurement-linked funds mandating that suppliers source products that have a specified minimum proportion of U.S. content. And Australian firms will have only restricted access to the U.S. government procurement market, limited by numerous U.S. discriminatory "buy national" arrangements, and an entrenched "buy U.S." culture.

In regard to investments, the authors note:

"While the United States has managed to secure the free movement of its own business executives to Australia (the so-called 'essential personnel' necessary to make joint ventures and other forms of direct foreign investment work effectively), it has resolutely denied Australian investors the same rights in the United States." The authors point out that over the past ten years "the vast majority of U.S. investment in Australia has been the take-over or purchase of Australian firms or assets--that is, for the simple transfer or wealth from Australian to U.S. firms. By comparison, U.S. 'greenfield' investment in this country--investment in new...