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FTA Fears Growing

FTA Fears Growing

Concern is mounting about the likely impact of the proposed US-Australia Free Trade Agreement on Australia’s national sovereignty and the ability of future federal and state governments to regulate in Australia’s national interest.

While the Howard government hopes it is on a winner with the FTA, and some sectors of the Australian economy have welcomed the deal, a rising pile of submissions to the Senate Select Committee’s Inquiry on the Free Trade Agreement between Australia and the United State of America have expressed major concerns. Of the 156 submissions received as of May 6, many express fears about the impact of the deal and/or urge its rejection by the Opposition Parties in the Senate.

Australian National Research Economist Professor John Quiggan, for instance, finds little to commend the proposed agreement, at least considered in isolation. He says the agreement fails to address the major distortion in goods, and that its main adverse impact lies in areas that ought to be outside the scope of a trade agreement, the most notable being intellectual property. And he says no such agreement should be allowed to tie the hands of future governments.

“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. Parliament must assert its capacity and responsibility to determine Australian law, rather than being bound by the conclusions of closed door negotiations.”

The New South Wales government, while supporting the intent of the agreement, expresses disappointment that the original objectives for agricultural market have not been achieved and expresses concerns any gains will be offset by restrictions on Australia’s capacity to independently regulate and set the national agenda in some areas, such as Australian media content, economic and environmental policies.

Senior Lecturer at the School of International Business at Queensland University of Technology Mark McGovern is scathing, calling the agreement “seriously flawed in design and detail,” “against the national interest in several ways, including through direct and indirect diminution of Australian sovereignty and capacity,” and “not only demonstrably and potentially injurious to a range of sectors, regions and arrangements in Australia but also yielding of no likely net economic or other gain.”

“It is surprising that such a poor proposal could have been initially agreed between supposed allies,” McGovern wrote. “Likely and possible reductions in Australian national capacity would see it more vulnerable and heavily dependent on the USA than it otherwise would have been, severely straining alliance capabilities and worth well into the future.”

He also says the agreement can be seen as one result of a sequence of failures in Australian national understanding and actions, including a failure to understand market conditions and operations, and a failure to distinguish economic and political considerations in a constructive manner, especially as regards economic development, national interest and the exercise of sovereignty.

Others who have studied the impact of the North American Free Trade Agreement (NAFTA) on Mexico and Canada have also expressed alarm.

Robyn Doherty, who says she has studied NAFTA extensively and found it to be a retrograde step for Mexico, Canada and many sectors of the US, finds similarities in the our proposed FTA with the USA “but with some extra problems for Australia.”

As well as limiting Australian content rules for new forms of media and adopting US Copyright law, leading to higher costs for libraries, schools and universities, she says the FTA “binds of freezes many areas of state and local government regulation at existing levels and limits the ability of governments to make new laws and policies on essential services like water.” She also expresses concern that it outlaws government purchasing policies giving preference to local products or requiring US contractors to form links with local firms to support local employment. And she worries about the dispute process which would enable US government to challenge many Australian laws and regulations before a trade tribunal on the grounds that they are too burdensome to business or a barrier to trade.

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