Free trade deal a bad idea

Issue 

Australian and US government representatives finally agreed on a free-trade agreement (AUSFTA) on February 9, after 11 months of negotiations and widespread protest and controversy in both countries. Amid claims and counterclaims about which national economy got the better end of the deal — the full text of which has not been released — all that is certain is that working people will lose out.

The agreement is the latest in a series of bilateral and regional trade agreements that the rich, industrialised countries have sought in the wake of the collapse of World Trade Organisation meetings in Seattle in 1999 and Cancun last year. At both meetings, underdeveloped countries resisted a broad multilateral deal that could only decimate their economies. The rich countries and the big corporations that dominate them have had to look to other means to extend the opportunities for investment.

For around two years, the AUSFTA has been boosted by the America-Australia Free Trade Agreement Coalition, a group of more than 60 corporations, including Boeing, Alcoa, Exxon-Mobil, Coca-Cola, General Electric and McDonalds from the US and Visy, Westfield, Lend Lease and News Limited from Australia.

PM John Howard has invested a lot of political capital in the AUSFTA, both to boost investment for Australian corporations and in an attempt to show that his close alliance with US military power will yield real gains for Australians.

The agreement was partly delayed by widespread concerns in Australia about how trade liberalisation would affect manufacturing jobs, service industries, media content and the Pharmaceutical Benefits Scheme (PBS).

While on February 9, Howard conceded the deal was "not perfect", but said it was "the best we could get in the circumstances", its implications are still unclear.

Under the deal, the PBS will stay — for now. Australia is obliged to set up an "independent review" with US input. Australian trade minister Mark Vaile claims that "the government has protected our right to ensure local content on Australian media", while US trade representative Robert Zoellick claimed that "the FTA contains important and unprecedented provisions to improve market access for US film and television".

Australia has agreed to phase out all tariffs on textiles by 2015 and automotive products by 2010, threatening jobs in these industries. It is unclear whether the losses could be made up in the similarly liberalised US market, especially with complex "country of origin" rules denying tariff-free exports to Australian manufacturers using certain amounts of non-US or Australian made components.

While the lack of any change for Australian sugar imports is a major back down for the Coalition government, Allan Burgess of the National Farmers Federation said the deal contained "major gains for agriculture", indicating that major sections of big agribusiness are happy.

A prohibition on preferential treatment for local service providers could mean that US higher-education providers find it easier to set up shop in Australia.

The deal has to make its way through parliament, and some obstruction in the Senate is likely with Labor, Greens and Democrats opposed to varying extents. Labor leader Mark Latham has stated, "I think the Australian government hasn't stood up effectively for Australia's interest", while Democrats' Andrew Bartlett argued that "the key areas that supposedly the Prime Minister was going in to bat for ... have been sold out".

Greens senator Bob Brown declared, "the Howard government has been slaughtered and Australian industries, agriculture and culture with it".

However, opposition expressing a nationalist concern for a "better deal" for "Australia", reflects not so much the interests of ordinary people, but divisions within the Australian ruling class about the agreement. This is also shown in disquiet within the National Party and concern voiced in some sections of the establishment media, such as the Fairfax press.

To the extent that the AUSFTA removes barriers for corporations to invest at will, it threatens to intensify the exploitation of workers and attacks on the public sector, in both Australia and the US, though the former, being a much smaller economy, is likely to be much more affected.

The AUSFTA should be fought against, not to get "our" capitalists a better deal, but because defeating it would be a step towards an independent policy for working people.

From Green Left Weekly, February 18, 2004.
Visit the Green Left Weekly home page.

If you like our work, become a supporter

Green Left is a vital social-change project and aims to make all content available online, without paywalls. With no corporate sponsors or advertising, we rely on support and donations from readers like you.

For just $5 per month get the Green Left digital edition in your inbox each week. For $10 per month get the above and the print edition delivered to your door. You can also add a donation to your support by choosing the solidarity option of $20 per month.

Freecall now on 1800 634 206 or follow the support link below to make a secure supporter payment or donation online.