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June 07, 2004
FTA: selling Australia short
There was an article in the Review section of the Australian Financial Review on Friday (subscription required), which argues that Australia's FTA with the US is very lopsided. It actually means a lessening of Australian sovereignty.
This is the argument:
*Australia grants the US total and immediate access to our markets in areas in which it is strong (manufactures and services) whilst the US effectively shuts Australia out of markets where it is strong (fast ferries, beef and dairy, stone fruits).
*Australia is obliged to harmonize its institutions, procedures and laws with the US counterparts without any reciprocity.
*quarantine regulatons and restrictions, which are essential for Australia's biosecurity, are to be treated as trade barriers when they impinge on US exports. Thsi is already happening with Biosecurity Australia's rejection of the science about the diseases in Philippine bananas and California grapes and allowing their importation.
*the use of the FTA by US pharmeceutical companies to raise drug prices in the Australia to US levels. This means either winding down the PBS system, or chaanneling resources from other parts of the health system to pay for the increased prices.
*the Australian government has abandoned any "Buy Australia" clauses or conditionalities even through the US retains their "Buy America" policies to bolster its own industries.
The FTA has less to do with free trade and more to do with integration with the US. This is power politics in which Australia surrended some of its ability to act in the national interest.
So what some would say? Well think of the impact of this selling Australia short on the National Party seeking re-election. The Costello Budget gave their electorates very little. Their is climate of discontent in regional Australia, the NATs are not travelling well in the Bush, and they are facing further ongoing decline. Even if they lose one seat that makes it just so much harder for Howard to hang onto the eight seats needed to retain government.
Another consideration is that the big in the knowledge intensive industries the American companies are likely to overwhelm their small Australian opposition, wipe out local competition and take profits offshore. As the National Institute of Economic and Industry Research (NIEIR) Report for the Australian Manufacturing Workers Union said:
"The US is a first class knowledge-based economy. Australia is not. The loss of sovereignty provisions in the agreement will probably ensure that Australia will never become a knowledge-intensive economy."
Australia needs to pass a series of pieces of legislation with in the next six months so that the agreement can come into operation on January 1 next year.
Posted by Gary Sauer-Thompson at June 7, 2004 09:42 AM
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Comments
Yet another serious and potentially election defining issue upon which the Labour party has been virtually silent.
I can't imagine why members of the Liberal party actually believe this will make Australia a better place to live.
Let's hope it never happens.
Posted by: kez at June 7, 2004 03:04 PM
I had an interesting time in Canberra recently. American IT contracting firms have been sniffing around again after considerable absence. Poised for the swoop no doubt.
Posted by: saint at June 7, 2004 10:41 PM
Saint,
do tell us more.I'll be in Canberra next week.
Posted by: Gary Sauer-Thompson at June 8, 2004 08:03 AM
I agree, this is all about power politics, not trade. Cosy deals with powerful friends sit well with the Libs who like to emulate their founding father, Menzies. True, multi-lateral free trade is in Australia's interest - not this sycophantic deal where we become an integrated 'spoke' coming out of the US 'hub'. I hope Labor gets stuck into this deal and force either serious changes or its outright rejection. This deal also has serious cultural and sovereignty issues along with threats to Australian working conditions that need challenging in parliament.
Posted by: Jock at June 9, 2004 08:50 AM