navigate
recent
referrals
other
« aussie blogs »
all content is copyright by the respective authors.
US/Australia Free Trade Agreement
October 29, 2003 06:37 AM
I did a bit of research on free trade yesterday because of my developing concerns and worries about the proposed bilateral free trade agreement between the US and Australia. The absence of a long-term vision of the future relationship between the US and Australia during the Bush visit was noticeable given that both ccountries are in danger of being locked out of East Asian trade flows.
Maybe one is buried in the proposed free trade agreement?
From the material I came across yesterday, my judgement is that this agreement is one sided, as it geared to advantage the US more than Australia. This is what the Australian globalists in big business are fogging.
Australia is being offered guaranteed access to the giant US market and to hitch a ride on the engine of world growth. The rhetoric that free trade is the best public policy on the table is the message from Canberra these days. The big idea and grand bargain for the free movement of capital and commodities will bring immense benefits to Australia including a bounty of jobs. It is a great idea because Australia and the US are basically the same kind of society and have the same values. And as John Howard, enthused during President Bush's visit, the significance of America for Australia will grow as the years go by, not diminish. The proposed free trade agreement highlights that.
So how does the proposed free trade agreement advantage the US? In this strategic bargain Australia is being asked for a ranged of concessions on the PBS scheme, the new cultural industries, foreign investment, quarantine and environmental regulations etc for such access. So I went and had a look at the Canadian/US free trade agreement.
From what I've been able to gather, the effect of the free trade agreement is to integrate Australia into the US; or more accurately to integrate the Australian market into the US one. That means convergence of the regulatory framework in areas such as environment and resources, tax and competition policies, and a harmonization of monetary policies. The terms and conditions for access to the US market (excluding agriculture of course) involve buying into controls and restrictions on Australia's ability to act.
Does that mean swapping the Australian dollar for the US one? It does mean democratic regulation of busines activity is replaced by an international regulatory regime driven by the interests of big business. Hence important decision of governance are taken out the hands of democratically elected governments.
The Americanizers in big business are silent about the politics.
Is this being too negative? No. Over a couple of decades after signing up Australia will be sucked into the American economy.
So the question we need to ask is: what is the impact of the economics of integration on Australia's national sovereignty, our standard of living and our way of life?
Let me pick up one of them. National sovereignty. What I gathered from the Canadian material is that the vision buried in the free trade agreement is not just about economics and market integration. The big idea of integration is grander than that. What is also involved is the increasing integration of two societies. The ongoing and silent integration involves doing away with the borders as an impediment to investment and development establishing a customs union, broad convergence in policy, military integration and placing Australia inside the American perimenter or defence shield.
Why is national security buried inside the market? Security is the foundation of free trade and prosperity. That is why the imperial Presidency boosted the war on terror on his regional whistle stop tour. Bush lacked a vision of how the US expects the Asia Pacific region to develop economically during the 21st century, or how the vast trade imbalances between the US and Asia can be dealt with.
But security underpinning the market does mean a range of infringements on Australia's independence and sovereignty.
Not to worry, say the Americanizers. Australia is so like America anyway. What's the big deal if Australians harmonize and integrate even more with the US?
But how much sovereignty should be sacrified in the pursuit of integration?
comments
As the source of much of argument regarding the pending Australian-US trade agreement, let me say this - beware.
Having rules and groundwork for trade is great and is necessary but beware of the beast dressed as a benign object. Canada and Mexico were duped into believing many of the very same things your government is telling its people.
They will claim an increase in market access and with that will come jobs and an increased economic outlook.
Its all smoke and mirrors. America has no interest in free trade - we Canadians know that first hand. Canada has seen a net decrease of over 150,000 jobs since ratification. Our GDP growth in the 1990s was the worst since the Great Depression. Innovation and research has plummeted as our companies are no longer under Canadian control.
Another example - even though under our agreement NAFTA - that we are to have equal access without tariffs or duties that is not what is happening. Softwood lumber is a major export for many Canadian provinces and we have seen not once or twice but a DOZEN attempts by the US government to put duties and penalties on Canadian exports of softwood lumber as they claim we dump onto their markets. The WTO has decided against the US each and every time. This has NOT stopped them from doing it again. At this very moment 1000s of Canadians are out of work as a result of a 28% duty slammed onto our exports of softwood lumber. So much for free.
It does not stop there - wheat, tomatoes, potatoes and other goods have seen duties put on as a simple result of us having a competitive advantage over our American counterparts. Do not trust the snake oil being sold by Howard.
It gets even worse. With time and increased access to your markets you will see a sudden and dramatic increase in buyouts of your companies.
In Canada we are nearing 50% foreign ownership of our industries and corporations - with most being American owned. Of Canada's top 500 companies a full 35% are foreign owned.
In 1997 there were 41 large Canadian petroleum companies. Today there are six. Of the 35 that no longer exist, U.S. companies bought up 21.
In energy and in resources, Canada's ability to control its own supplies and prices has been drastically reduced. Canadian oil and natural gas prices are now set in the U.S. If the U.S. faces a severe shortage and their market dictates huge price increases, too bad, Canadians will face the same high prices. Canadian oil and gas can no longer be sold at lower prices in Canada than the prices we charge Americans.
With the ratification will come direct competition with US companies. This means there will be tremendous pressure on your government to steadily cut corporate tax rates and the rates for the rest of the wealthy - the trickle down theory - or the staying competitive line.
With those decreased tax rates will come massive social cuts in health care, social services, aboriginal monies, and a tax shift onto the lower classes. Once they begin to suffer, Howard and the like will claim privatization will be the answer to all your ills. Don’t believe it. Every single sector of the Canadian economy that was public and turned over to private industry has seen - increased costs, degradation of services, and even avoidable death through unclean water and food.
Contained within the trade deal are sovereignty killing clauses such as our infamous 'chapter 11'. What that does is gives investors and corporations the same and increasingly more rights than private citizens. For example, when Canada through our House of Commons banned a toxic chemical known as MMT because it was shown to cause nervous system disorders, the Ethyl Corporation of the US sued under 'chapter 11' claiming lost profits, and future lost earnings. Even though the chemical was banned under democratic procedure for the benefit of all Canadians it was overturned, and we had to pay compensation! And it goes on... the Sun Belt Water Company is suing for over 1 billion dollars because the Canadian provinces voted not to allow bulk water shipments. In essence, your government will become a powerless tool of the people while foreign companies control your national agenda all in the name of 'free trade'.
I could go on and on and on about all the ills hoisted upon us through our one-sided trade deal with the US but I think you are getting the picture...
Roy,
Thanks. They are good comments.
I am posting them here
Insanity is forgetting to believe a few lies.