The collapse last week of trade talks at the World Trade Organisation (WTO) meeting in Cancun, Mexico, has re-focused attention on the US-Australia negotiations for a bilateral free trade agreement (FTA). On September 14, trade minister Mark Vaile said that he had reached a "breakthrough" after meeting with US Farm Bureau head Bob Stallman.
The major sticking point between Australian and US capitalists at the moment is the question of tariffs and import quotas on farm products, including sugar, peanuts, beef, lamb and dairy products. At the moment, while the US imposes both on most Australian farm exports, Australia imposes almost none on US farm imports.
The US Farm Bureau has been staunchly opposed to any trade agreement with Australia that might open the US market to increased Australian imports. For Australian agribusiness, however, the whole point of the FTA is that it should do so.
Ominously for Australian agribusiness, the free trade agreement between the US and Chile, concluded earlier this year, staggered the lessening of US agricultural quotas over 12 years, making the agreement virtually meaningless.
Belief that this sticking point would be difficult to overcome led many Australian business bodies, including the National Farmers Federation, to try to push the federal government to prioritise the WTO discussions in Cancun over the US-Australia FTA. As a leader of the Cairns Group of countries, Australia was pushing for the WTO to demand that all member-countries lessen their agricultural quotas.
Following the collapse of the WTO meeting, the government has come out swinging in favour of getting a US-Australia FTA stitched up as soon as possible. "We can't afford to go into competition with the big boys", Vaile told Australian Associated Press on September 15. "But if you can get a breakthrough [in the US-Australia FTA], that will of course improve greater access for Australian agriculture into the enormous American market. Even a small concession by America, given the size of her market, would be a huge boost to Australian farmers."
How small is still in doubt. Smallman told the Australian Financial Review on September 16 that the US Farm Bureau would only support a "Chile-type agreement". He conceded, however, that "a political decision had been made" by Washington to pursue the FTA with Australia.
The US has been rewarding its allies in the war against Iraq with free trade agreements, while refusing them to those which did not support the war. In March, for example, a US Congress lobby-group began the process of getting legislators to vote on beginning FTA negotiations with New Zealand. By May, when Wellington's opposition to the Iraq war was clear, US trade representative Bob Zoellick squashed the process, explaining that "some things done recently would make an agreement hard to carry [through Congress]."
Whatever Australian big business wins or loses out of an FTA with Washington, it will make life much worse for the great majority of people living in Australia. And this is why it must be opposed.
As Australia has few quotas and tariffs left to trade, the Howard government is putting many of Australia's key social services on the bargaining table. For example, US drug companies want the Pharmaceutical Benefits Scheme — through which the federal government provides subsidised drugs to patients — substantially dismantled so that they can gear Australian medicine sales to profit and away from health needs.
And ordinary people may lose even more control over what they eat. US food producers are extremely keen to do away with the obscure labelling that still identifies genetically modified food, arguing that it is "anti-competitive" because people don't like to buy GM products!
US President George Bush's visit to Australia next month is designed to shore up the Canberra-Washington alliance. Bush probably wants to ask for more Australian troops to be sent to Iraq. Howard and Vaile are undoubtedly hoping that one of the carrots that will be up Bush's shirt sleeves is some more concessions on the FTA.
"I'm sure that while President Bush is in Australia he will have something positive to say about maintaining the political momentum to conclude this [FTA] deal", Vaile told the Melbourne Age on September 15.
This trade deal should be opposed not only because it is born from the blood of the Iraqi people, but because it is designed to make life harder for working people. It is another reason to protest Bush's visit to Australia.
From Green Left Weekly, September 24, 2003.
Visit the Green Left Weekly home page.