CPA statement on Free Trade Agreement:
Defeat the FTA

The proposed Free Trade Agreement (FTA) between Australia and 
the United States of America poses a most serious threat to the 
sovereignty, independence, economic prosperity and security of 
the people of Australia. It is not simply a trade agreement but 
an outright sell-out and betrayal of Australia to the US 
corporate agenda for global domination by a government that 
cannot do enough to please its Washington masters.

Trade Minister Mark Vaile described the agreement as "a great 
example of government working with industry". It is certainly is! 
It was negotiated in secrecy by government and big business 
representatives, and the details of the agreement have still to 
be released to Parliament and the public. The honourable minister 
appears to have a lot to hide, judging by the vagueness of his 
statements and obvious lies.

US reports reveal that there will be changes to the 
Pharmaceutical Benefits Scheme. These include establishment of an 
"independent" committee with the power to override decisions of 
the government committee over listings and a strengthening of the 
big pharmaceutical companies' patent rights at the expense of 
cheaper generic medications. This will result in higher prices. 
At first the Government may absorb these, using taxpayers' money, 
but eventually they will emerge in the form of higher script 
payments. As prices of medications move towards those in the US, 
Australians can expect to pay between three and ten times as much 
for their scripts.

Minister Vaile is clearly lying when he tells the Australian 
people that "the price and listing arrangements that ensure 
Australians access to quality, affordable medicines, remains 
intact" and that the price of prescription medicines will not 
increase as a result of the FTA.

"This is the most significant immediate reduction of industrial 
tariffs ever achieved in a US free trade agreement", the US Trade 
Office proudly declares. It estimates US exports of manufactured 
goods to Australia will increase by US$2 billion (A$2.6b) 
compared with a corresponding increase of only US$1.4 billion for 
Australia. This will increase Australia's trade deficit with the 
US (already A$6 billion) and lead to the loss of many thousands 
of jobs. Rural In return Australian rural exporters (especially 
large agribusiness concerns) will benefit from the removal of 
tariffs on lamb, sheep, cereals and some horticultural products, 
and increases in some quotas. The beef quota, for example, will 
be increased in small increments over 18 years, and tariffs on 
wool removed within four years and other wool items within 10 
years. But for sugar growers, the US markets remain as tight as 
ever.

The FTA covers much more than just trade in manufactured goods: 
it also covers "trade in services", that is, the provision of 
education, welfare, health, financial services, transport, 
telecommunications, energy, water, entertainment, media, audio 
visual, and other services. It also goes beyond trade to cover 
foreign investment, securities markets, quarantine regulations, 
customs, industrial laws, environmental, intellectual property, 
competition policy, deregulation, health and safety, and other 
issues.

Environment to rely on "voluntary market-based mechanisms" 
Quarantine Quarantine and environmental regulations are also seen 
as barriers to investment and trade. The FTA will see an easing 
of our vital quarantine laws and a weakening of existing 
environmental protection. The agreement advocates instead the 
promotion of "voluntary, market-based mechanisms to protect the 
environment". But the handing over of quarantine matters to 
"market-based mechanisms" endanger the health of our people and 
the security of crops and animals. They could have catastrophic 
effects. Possible changes to labelling requirements (eg for 
genetically modified foods) also pose a serious threat to public 
health.

The transnational corporations (TNCs) consider protection against 
foreign takeovers and preference to domestic companies to be 
barriers to investment and trade. The clear aim of the FTA 
negotiators was to remove such "barriers".

The FTA opens up the Australian economy to US corporations and 
financial institutions. Trade Minister Mark Vaile claims that 
Australia "retains the right to examine significant foreign 
investment proposals in all sectors". But his US counterpart 
says, "All investment in new businesses is exempted from 
screening under Australia's Foreign Investment Promotion (sic) 
Board (FIRB)". (The correct title is Foreign Investment Review 
Board — was this a Freudian slip or does it indicate that major 
changes to the FIRB have in fact have already been canvassed or 
agreed on?)

The US statement continues: "Thresholds for acquisitions by US 
investors in nearly all sectors are raised significantly, from 
A$50 million to $800 million. This higher threshold would have 
exempted nearly 90 percent of US investment transactions from 
screening over the past three years." Media and audio visual 
Vaile makes an amazing pronouncement about provisions on media 
and audio visual issues: "The agreement ensures that there can be 
Australian voices and stories on audiovisual and broadcasting 
services, now and in the future." Can be? Must be!

But in fact the elimination of "Australian voices and stories" 
seems likely judging by US claims: "In the area of broadcasting 
and audio visual services, the FTA contains important and 
unprecedented provisions to improve market access for US firms 
and television programs over a variety of media including cable, 
satellite, and the internet."

These examples show that the FTA is a comprehensive document 
going far beyond trade questions. It picks up on many of the 
provisions of the previously discredited and aborted Multilateral 
Agreement on Investment and some of the most contentious demands 
made by the US, Japan and European Union that led to the collapse 
of the Seattle and Canczn WTO ministerial meetings.

The FTA says there may be "joint cooperative activities to 
advance common objectives and work on labour law and practice " 
What does this mean? In the context of the far greater power of 
the US and the grovelling, capitulating nature of the Howard 
Government this can only mean Australia adopting the pro-
corporate, anti-union laws and practices of the USA.

The claim by the Australian Trade Department that "Both parties 
retain the right to establish their own domestic environmental 
and labour standards and to adapt or modify their own laws" is 
not convincing, especially since the TNCs criticise differing 
laws and practices between countries as a barrier to trade and 
investment.

The FTA threatens the sovereignty and independence of Australia. 
It undermines the right of elected governments to regulate key 
aspects of essential services, investment, industrial development 
and environmental protection. Government powers in the sphere of 
labour protection would also be curbed. Decisions about all those 
promised new jobs would be made in New York boardrooms. Even 
local government faces loss of control of services.

Based on NAFTA

We are told that much of the FTA is based on the North American 
Free Trade Agreement (NAFTA,) between the US, Canada and Mexico.

When the Mexican Government signed on to NAFTA, the people there 
were similarly bombarded with tales of export-led growth, 
economic security (we are promised 50 years of it!), employment 
opportunities, higher wages, environmental protection, improved 
welfare. We are promised all of these plus labour rights! But for 
the people of Mexico these promises proved to be myths.

The reality for Mexican workers was quite different. NAFTA 
resulted in the distortion of trade flows, loss of productive 
capacity, a stagnant economy and foreign investment largely in 
the form of takeovers and mergers. Workers have born the brunt of 
NAFTA. There were job losses and wage reductions. Prices 
rocketed, unemployment rose and somewhere between 25 and 40 
million Mexicans now live in extreme poverty. The toll in term of 
health and malnutrition is horrendous, with an estimated 60 per 
cent of indigenous children suffering from severe malnutrition. 
NAFTA has also been used by the TNCs to drive down wages and 
working conditions across North America by pitting US, Canadian 
and Mexican workers against each other as they vie for too few 
jobs.

While conditions in Australia are not the same as in Mexico, the 
scene is being set for similar outcomes. The people of Australia 
would face further privatisation and US corporate domination of 
health, education, water, energy, welfare, transport, etc, with 
higher prices, poorer quality services and all the other ugly 
consequences of profit-first provision of essential services.

Political decision

The FTA is a mechanism for the economic neo-colonisation of 
Australia by US corporations. In Canada, under NAFTA, the 
Canadian Government was successfully sued by a US corporation for 
attempting to legislate to ban the sale of fuel containing a 
proven carcinogenic additive. Not only was the government forced 
under the provisions of the "free trade agreement" to allow the 
cancer-causing product to be sold, but it was obliged to issue a 
public statement that the additive was "harmless" even though all 
the scientific evidence clearly showed it was not.

What the Australian Government describes as the integration of 
the Australian economy with that of the US is inevitably an 
unequal relationship — in the economic, political and military 
areas.

Above all the FTA is a political decision with far wider 
implications for Australia and the world than the economic and 
social ones raised above.

The Howard Government is primarily concerned about demonstrating 
to the US its strong political loyalty and that it can always be 
relied upon. It is less concerned about the interests of the 
Australian people or the Australian economy. For the Howard 
Government the main question is not whether the Australian people 
or even Australian industries benefited or suffered from the FTA. 
The main question is Australia's "partnership" with the US — 
economically, politically, militarily and in every other way.

The FTA seeks to bind Australia even more tightly to the USA in a 
relationship where the US will be the dominant power and 
Australia at best, a deputy sheriff policing the region and 
running to the assistance of the Global Cop around the globe 
whenever summoned. Blindly Australia already blindly follows the 
US in its wars, carries out joint military exercises under US 
command, and provides facilities including Pine Gap for US 
military and intelligence services. The US is in the process of 
establishing bases near Darwin and in Western Australia. The 
Howard Government supports and is participating in the aggressive 
and hideously expensive Star Wars program and is about to embark 
on a massive $50 billion military equipment program to facilitate 
the integration of our military with that of the US. Much of that 
money will be spent in the US, whose corporations will rake in 
even bigger profits as tariffs are removed.

Australia is important to the US in its pursuit of global 
domination because of its strategic position in relation to 
Indonesia, South East Asia, Korea, China and Taiwan and the 
Pacific Island nations. It is also important as a resource basin 
for the large manufacturing sector in the US and as a stepping 
off point for economic ventures in Asia.

The FTA is a major step in the process of a US takeover of 
Australia.

In global terms it sets a model for the US to push at the WTO and 
in other bilateral and regional negotiations for similar 
agreements. Just as there is pressure on Mexico and Canada now to 
extend NAFTA into other areas, including common laws and 
policies, there will certainly be pressure on Australia to extend 
the FTA to integrate Australia with the US in much the same way 
as the countries of the European Union are now integrated.

The FTA must be defeated. Every ordinary Australian has an 
interest in seeing it defeated — students, workers and trade 
unions, actors and filmmakers, local manufacturers, small 
farmers, pensioners, the unemployed, environmentalists, peace 
activists... all have common interests in seeing it defeated.

There is an alternative

There is an alternative based on:

Sovereignty and democracy: Elected governments should not 
be overridden by commercial interests or prevented from 
legislating or acting in the interests of people.

The economy: Governments should control key economic 
levers such as banks, financial flows, investment, imports, 
telecommunications, postal services, water supply, job creation, 
trade to be put on the basis of mutual benefit and all other 
aspects necessary to protect Australia's sovereignty and 
independence.

Social services: Governments should retain responsibility 
for the provision of basic essential public services in health, 
education and welfare.

Regulation of the economy: Both the private and the public 
sector should be made accountable. 

Environmental protection should be a priority of 
government in their economic management.

Industrial: Australian governments should be free to 
legislate on industrial issues without having to make any 
sacrifices of sovereignty and independence arising from trade 
legislation.