A completely misleading description

The US-Australia free trade agreement


John Quiggin


The main points of this submission are:

1. The most important distortions of agricultural trade practised by the US are unaffected by the FTA and are, in effect, endorsed by Australia's signature to the agreement.

2. Considered in isolation, there is little to commend the proposed agreement. As regards goods, the agreement fails to address the main distortions, such as the US Farm Bill and the protection of the US sugar market while imposing a substantial loss on Australian taxpayers in the form of reduced tariff revenues. Impacts on services are modest.

3. The main adverse impacts of the proposed agreement lie in areas that ought to be outside the scope of a trade agreement. The most notable, as regards the commitments actually entered into, is intellectual property.

4. A Free Trade Agreement between Australia and the United States should be confined to the removal of barriers to trade in goods and services. Issues relating to economic integration should be dealt with in a multilateral context and in a manner that does not prejudice the democratic rights of Australians to control their own social and economic institutions.

5. Parliament must assert its capacity and responsibility to determine Australian law, rather than being bound by the conclusions of closed-door negotiations. Objectionable provisions of the FTA requiring legislative change, such as the extension of copyright, should be rejected. It would then be up to the US Congress to decide whether to accept an agreement which, while still weighted in favour of US interests, was less unbalanced than the current proposal.


Economic evaluation of the proposed agreement

The FTA should be assessed in two ways. First, it is necessary to consider the specifics of the agreement as it currently stands. Second, and more importantly, this agreement must be viewed as the beginning of a process of economic integration with the United States. It is necessary to consider both the desirabili