"Free Trade" bonanza for US
by Anna Pha When Prime Minister John Howard visits Washington later this month he hopes to return with a commitment for negotiations for a free trade agreement (FTA) between Australia and the United States. The proposals for such an agreement extend far beyond the question of trade and could have a very serious impact on Australia's future sovereignty and independence. Trade Minister Mark Vaile and Foreign Minister Alexander Downer are at the helm of the push for such an agreement. A report commissioned by the Department of Foreign Affairs and Trade last June from the Centre for International Economics claims that such an agreement could bring about an annual increase of US$2 billion in GDP by 2010. (Note the figure is US$ the Australian Government provides US-Australia trade figures in US dollars!). Last year the United States was Australia's second largest trading partner just behind Japan. In 1999 Australia exported US$8.1 billion of goods and services to the United States while the United States exported US$15.2 billion worth to Australia. The US is the source of nearly 20 per cent of Australia's imports and accounts for around 11 per cent of Australian exports. A free trade agreement between the two countries would not automatically result in a lifting of tariffs, subsidies and other mechanisms which are considered as barriers to trade or disadvantaging one country's products in the other country. Specific products and services would be negotiated and the removal of barriers phased in. Australia is looking in particular for the US to reduce tariffs and remove other restrictions on imports of agricultural products. At present Australian sugar exporters are disadvantaged by various barriers that amount to a tariff equivalent of 80 per cent. For dairy products the tariff equivalent amounts to nearly 24 per cent. Lamb, cotton, metals and financial services are other areas of concern. Australia has just had a break-through with reductions of tariffs on Australian lamb although some of this break-through will be off-set by an increase in assistance to US farmers. In the long term Australian farmers may actually stand to lose a great deal if the US gets its wishes in an FTA. One of the US's key demands is the removal of quarantine restrictions on products such as chicken, pork, corn and course grains, stone fruit, apples, Californian table grapes and Florida citrus. The removal of these quarantine restrictions could see the entry of diseases and pests with the potential to destroy Australian crops and wipe out whole sectors of the industry And as if we do not have enough US TV programs already, one of the demands of the US is for the complete removal of local content rules on Australian TV. The US pharmaceutical lobby is also supportive of an FTA with Australia. It wants to see the PBAC abolished and our Pharmaceutical Benefits Scheme destroyed so that US pharmaceutical transnationals can freely enter and sell their products at monopoly prices to those who can afford them. The US is also seeking to get rid of the wheat marketing board and have Australia abolish other marketing systems such as with rice. It would like to see a situation such as we have in the coal industry where various mining interests in Australia are competing with each other, undercutting each other to sell their products. Prices would be forced down, farmers put out of business and in the long- term Australia would lose badly. The US is also keen to see protective measures removed in the purchase of military equipment, submarines and other military expenditure. The FTA proposal being floated is not just restricted to trade. It could take the form of a mini-multilateral agreement on investment. US corporations expect the remaining restrictions on investment in the financial sector and other areas lifted so that they can make further inroads in taking over the Australian economy. The United States is already the largest source of foreign investment in Australia. Such an agreement would just increase its control and domination. On the surface, the FTA would appear to be moving towards the so-called level playing field. In practice it would be an agreement or arrangement between two very unequal partners. It would amount to a take-over by US corporations in the interests of US corporations at the expense of the Australian people, Australia's sovereignty and economic independence. Apart from the direct economic damage it would do to Australia it would also have ramifications for Australia in the Asia Pacific region. Giving preference to the US over other countries in the region, would only be seen as another bending of the knee of Australia to the US, along with our role as deputy sheriff. In this case we would not be a deputy we would be swallowed up by the US. The Australian Government sees an FTA with the US as an important step towards economic integration between Australia and the US and as a deepening of a strategic (military and political) alliance with the US. It certainly would be a step towards economic integration, not between Australia and the US, but of Australia into the US with a complete loss of sovereignty and economic political independence.