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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

Arguing about free trade « Previous | |Next »
November 7, 2003

There was an editorial in the Australian Financial Review(AFR) (subscription required 3 Nov. 03, p. 70) that addresses the arguments made against Australia's proposed free trade agreement with the US. It says that the main argument currently being being advanced is the size one. The size argument has been deployed by public opinion

The AFR characterises the argument as follows:

"The opponents of free trade warn sagely that big and powerful nations like the US and China will only act in their own interest. We should be grateful for that penetrating insight....The FTA opponents argue that, given the size differential, Australia will surely fail to win any concessions. In the US case, detractors say that the US will never give up its sugar program to suit Australia canegrowers. "

Well not quite. The size argument holds that Australia will have to make more concessions than the US, that the US will not remove its protection on agricultural commodities in the short term, and that the FTA will seek to remove Australia's environmental regulations. (See Blogger on a Cast Iron Balcony for more on the impact of the FTA on Australian's polcies to protect its ecology).

So how does the AFR respond? It says the argument:

" based on a wrong premise. In the context of the FTA talks, the goal of the Australian canegrowers is better access to a lucrative market (where the prices are about three times the world price), not necessarily the end of the sugar program. In short, the FTA, should deliver a larger share of that protected market, while latter multilateral negotiations can later achieve the broader goal of destroying the US sugar program."

The response by public opinion is that Australia will have to make lots of concessions in other areas to gain that access and integration with the US market. This, no doubt, would be accepted by the AFR.

The AFR then gives an insight why the price of making lots of concessions is worth paying:

"Closer economic relations with the US and China (and others) offer the chance of regaining momentum on domestic structural reform, and locking Australia's future with the economic superpowers sof the 21st century. They are opportunites not to be missed."

So free trade is an instrument of social engineering to reshape society so that it harmonizes with a free market. That's the point of making the concessions.

| Posted by Gary Sauer-Thompson at 1:44 PM | | Comments (0) | TrackBacks (1)

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