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Free Trade: strange pathways « Previous | |Next »
August 3, 2004

In an early article last year Peter Gallaghan criticizes the views of the conspiracy theoriests about the US and the bilateral Free Trade Agreement with Australia. He rejects the conspiracy theoriest's evil US motives argument in favour of the US go ahead with the FTA with Australia because of the welfare gains from a more liberalised trade regime.

The evil US motives issue Peter raised is not one in dispute now- after the Senate Report has been handed down. It is accepted that there are economic benefits to Australia from trade. The dispute here is largely about the nature and size of the welfare gains of the US FTA to Australia, and the way the costs and benefits stack up. There can be enabling legislation in the Senate (through amendments) to minimize the costs (eg., the negative impact of the FTA on the PBS scheme).

The ALP senators made 42 qualifying recommendations about the way the FTA text needed to amended--presumably through the enabling legislation in the SEnate. The ALP has whittled this down to 2, and minor ones at that. So the ALP is not standing firm on these recommendations by way of amendments. It is continuing to crumble in the face of government pressure by actually providing little resistance in terms of tabling substantive amendments. Senator Conroy has given the FTA to the Howard Government.

Cathy Wilcox

Tis a sad day for some true believers. Others are more upbeat.

What has not been discussed much in the political debate, and what should be in dispute, is the strategy of preferential agreements (FTA's). What is the long-term effect a spaghetti bowl of preferential FTA's would have on Australia's trading regime with the APEC nations (Asia-Pacific Economic Cooperation)? What impact does it have on its capacity to create a more liberalised trading regime in the Asia-Pacific region?

The argument is that FTA's shift Australia's exports and imports from country A to country Y. They are all about trade diversion. What effect would this diversion and preference have on Japan? Was not Australia once trying to convince Japan to take the lead to create a multilateral trading environment in the Asia Pacific Rim region?

Is not an open regionalism a better approach to Australia's national interest than narrow trade preferences with selected countries that exclude many other nations?

So, are the FTA's building blocs or stumbling blocs? Do FTA's move the trading system forward?

Do not bilaterals take energy away in negotiating multilateral agreements? Do they not make it more difficult to engage in a multilateral discussions? How do you incorporate bilateral FTA's in a multilateral framework.

If Australia's bilateral agreement is really being justified on foreign policy considerations (the alliance) and not on trade consideration, then how does this move the international trading system forward in a more liberalising direction?

| Posted by Gary Sauer-Thompson at 10:29 AM | | Comments (4)


Why am I a "true believer" Gary? I guess you must mean a true believer in good policy. Where does that leave you?

A true believer in the good policy process yes; not in Paul Keating's 1993 tribal party political sense.

I'm the same kind of guy as you can see from the emphasis on the Senate at public opinion and the bilateral versus multilateral issue raised on this post.

Wow! A real true believer! Fairies too I suppose!

(I don't know who or what the '93 thing refers too - sorry, I get annoyed when I get stereotyped, incorrectly, as I guess most people do)

The 1993 Keating thing refers to the true believers quip in his victory speech.

Alas, it is not fairies after the free trade policy debacle.

There is some horrible detail in the Free Trade Implementation Bill that is before the Senate ---eg., intellectual property rights that will gouge Australian consumers---and it is not even being disscussed.

And Conroy is out there hustling--"Johnny you can have the FTA this week if you want. It will only cost you a dollar or so." He's hustling whilst turning a blind eye to bad policy, even though he knows that the Implementation Bill goes further in selling Australia short than the FTA itself.