http://www.greenleft.org.au/back/2003/541/
All the way with FTA?
BY SEAN HEALY
When they met over steaks and beer at the US president's Texas ranch,
the discussion between John Howard and George Bush turned quickly to the
Australian government's reward for participating in the Iraq war.
And this, we are told, is it a free trade agreement (FTA) between the
US and Australia which will further integrate Australia into the US
economy, gut existing social and environmental policies and allow freer
reign to giant US corporations. Some reward!
Free trade, it's been said, is a salesperson's slogan. When you hear
someone say free trade, you should ask What are they trying to sell me?
Australia enters these negotiations with a very simple agenda secure
concessions on the sale of agricultural products in the enormous US
domestic market. Not only will this make economic sense to the
government agriculture is still a major export earner. It will also
make political sense the National Party hopes that some concessions
will shore up its votes, presently leaking due to the economic crisis
facing many farmers.
Washington's demands will be more wide-ranging the shopping list
includes items from a wider range of corporate sectors. Among the targets:
the Pharmaceutical Benefits Scheme. The PBS, in place for 50 years,
ensures Australians have access to subsidised medicines through the bulk
purchase of drugs by the government. The US drug corporations have long
considered the PBS a barrier to trade and are demanding it be
overhauled. Fifteen companies have even formed a lobby group
specifically for this purpose.
Foreign Investment Review Board. The FIRB enforces requirements for
minimum Australian ownership in some industries. US corporations want
the removal of its powers to specify ownership limits in the media,
telecommunications, airline and banking industries.
Local content rules in film, television and music. The government
regulates to ensure that a certain amount of content is of Australian
origin, both to protect the domestic entertainment industry and to
ensure that specifically Australian cultural forms can be disseminated.
The US entertainment industry is keen on removing such barriers.
Labelling of genetically modified organisms (GMOs). Australian law
requires that any foodstuff containing GMOs must be clearly labelled as
such, and restricts the growing of GM crops. US agribusiness, the
world's largest user of GMOs, is lobbying hard for these restrictions to
be scrapped.
Quarantine rules. Australian laws on quarantine of food and other
materials has traditionally been tough, to keep diseases which don't
exist here out of the country. US companies claim that these quarantine
laws are a means of restricting trade and are calling for them to be
eased.
Restrictions on the provision of public services. The FTA would
allow US corporations to challenge government provision and regulation
of services such as health, education and water, and lead to
privatisation. This is the same agenda as the multilateral General
Agreement on Trade in Services (GATS) negotiations currently proceeding
in the World Trade Organisation, but in an even worse form.
There is even the possibility that this FTA may include provisions
giving private corporations the right to directly sue governments for
the impacts of their policies on those companies' operations. This right
is presently enshrined in the North American Free Trade Agreement,
covering the US, Canada and Mexico, and has allowed, for example, the
UPS parcel service to sue Canada for the fact that Canada Post has a
monopoly on standard letter delivery. It has also allowed another US
company (Metalclad) to successfully sue a Mexican city for refusing it
permission to build a toxic waste dump.
What is striking about comparing the two lists is how uneven they are
concessions on agricultural exports in exchange for concessions on a
wide range of social and environmental policies.
Partly this is a product of the sheer unevenness of any bargaining
between the US (population: 280 million) and Australia (population: 18
million). The Australian government's own report compares the size of
the Australian economy to that of a medium sized state, roughly
equivalent in GDP to that of Pennsylvania.
But that doesn't explain why the Australian government is so keen on the
deal if anything, Canberra has pushed it on Washington, not the
reverse. It's especially inexplicable when much of the modelling of
likely economic benefits is far from optimistic. The most recent
government-commissioned report, from ACIL Consultants, was almost buried
after it showed that, once unrealistic assumptions were removed,
Australia would actually suffer small net losses from an FTA. Another
report, by the CIE, found positive results but of still marginal size.
So why the haste on the part
