Issue Number 50 - July 2003

Australia-United States Free Trade Agreement – Why we need to get active

Janice Howard OSU

Do you get the feeling that we are fast becoming the 51st state of the USA? The deployment of Australian forces in the war against Iraq without consultation of our Parliament certainly supports that view. Less well recognised are the realities hidden in the much vaunted United States Free Trade Agreement (USFTA).

During last week about 50 Australian government officials met in Hawaii for the third round of talks on the proposed FTA. There has been some comment in the media – an article by Malcolm Cole (Perspectives 17/7/03) claiming to ‘dispel the myths’; it all depends on what you see as myths.

What would our gains be? The Australian Government wants to pursue the FTA because it envisages substantial gains in access to the US for Australian farmers. That sounds great. However, we know the power of the US farm lobby and many are sceptical that the US government would concede us access to US agricultural markets. From these most recent talks, word is about “staging” the changes – nothing too quickly. In fact it is not so long since the US legislated to increase agricultural subsidies.

And the danger signals? This “agreement” has been compared to one between an elephant and a mouse! It is estimated that our economy is the size of Pennsylvania’s. The US has little need for such an agreement, Australia would have to make concessions. The US has targeted the Pharmaceutical Benefits Scheme, Australia’s local content rules in film and television, our quarantine law and Foreign Investment Review Board as “barriers to trade”. While the Department of Foreign Affairs and Trade (DFAT) assures us that the US has no intention to abolish these entities, changes are certainly being considered with little public awareness. We know how subtly words can be used in politics! To look at these points in detail:

1. The Pharmaceutical Benefits Scheme makes medicines more affordable to most Australians. (US pharmaceutical companies object to it because it means that the price of medicines is lower in Australia than in the US.) This is a vital health and social equity policy which should not be targeted as a trade barrier.
2. The Screen Producers’ Association, The Film Commission and Media Unions have strongly defended local content rules and pointed to wide community support and previous bipartisan political support for them. The local content rules are a vital pillar of Australia’s cultural identity and ensure that Australian stories are told on film and television. These rules ensure a local skills base which enables quality films and television programs to be made here.
3. How can we contemplate reducing quarantine rules in the wake of the Mad Cow and Foot and Mouth disease scares?
4. Australia has investment restrictions on only a few strategic industries like the media, banking, telecommunications and airlines. Tampering with the Foreign Investments Review Board could render all these industries vulnerable to US takeovers.

Furthermore, as Ann Capling, a Melbourne University trade expert has indicated, a proposed link between security and trade is really frightening. “It’s been a cornerstone of both Australian and US foreign policy since World War II that security and trade issues are kept in separate boxes. To see them linked now has major implications for the Australia-US security alliance.” US Trade Representative Robert Zoellick sent a letter on November 13, 2002 to the US Congress notifying them of the FTA negotiation. In it, alongside a list of trade issues, he refers to “strengthening the foundations of our security alliance” and “promotion of common values so we can work together more effectively with third world countries”.

Beyond the immediacy of the proposed Free Trade Agreement, we still need to be watchful re what is happening with the General Agreement on Trade in Services (GATS). Religious Congregations have over the last century made huge investments in health and education, seeking to meet the needs particularly of the less privileged. The General Agreement on Trade in Services (GATS), signed by the Australian Government in 1994, covers these services along with many others. While GATS has some rules which allow government regulation of public services, we need to be very watchful of the fine print. Earlier this year the European Commission was asking for the inclusion of public water and postal services in the GATS. We know how adversely that would affect Australians in rural areas.

In summary, it is urgent for us, in ministry as religious, to be very clear about these issues and to be active in writing and speaking to other Australians as well as to our parliamentary representatives. Among resources for this article I have used newsletters from AFTINET (Australian Fair Trade and Investment Network), an important resource for all concerned with economic justice in our society, and in particular for leadership teams of religious congregations. Website for AFTINET is: www.aftinet.org.au and they can be contacted by fax on (02) 9299 7855.