Thought Free Trade Agreements
...mpact, commercial liberalism has trading with other nations as its main philosophical point. Nations who practice commercial liberalism rely on exporting and importing both to help their economy and to obviously acquire resources and products they lack by trade. Free Trade Agreements can be between 2 or more nations and aim to decrease or alleviate tariffs on imports and exports between the countries who sign the agreement. A tariff is a cost levied onto an import or export, and so it’s hoped that by decreasing these trade will flourish and as a result each nation’s economies will do likewise. The passing of the AUSFTA was one of the most controversial events of 2004 and did not pass easily through the Australian senate. As, at this point, there was no majority in the senate to any party, the Australian Labor Party threatened not to pass the FTA. Labor insisted that two amendments be implemented into the agreements legislation. The first and most major was concerning generic pharmaceuticals being available to the Australian public, as Labor Health Spokeswoman Julia Gillard said, “For the first time ever, if you are going to manufacture a generic drug, a cheaper drug, you need to give notice to the patent holder, and that opens the possibility that the patent holder will then litigate against you, just to stop you bringing that drug to market” (Gillard). The other amendment Labor insisted on was that it would not be possible to reduce the local content quota for Australian media outlets, “We want a guarantee that we're not going to lose our local content rules for television and radio in Australia” (Latham). Labor was very standoffish on these two amendments and insisted that they would not be willing to pass the FTA unless they were passed into legislation. However the government seemed very unsupportive of them as Health Minister Tony Abbott said, “The amendment… is both unnecessary and unworkable” (Abbott). Eventually though with the possibility that they could lose the FTA completely the Coalition did agree to try and add these amendments once legislating with the Americans began. Although 1/3 of Labor senators voted against it the FTA was then passed, because as Mark Latham said, “Despite several flaws in the agreement it has net economic benefits for Australia and on that basis should be supported” (Latham). But the question here is: were these two amendments really needed more than possible amendments on what others saw as larger flaws? There was a very popular belief around that time that Labor only focused on these two points so markedly “purely to allow Labor to save face” (Quiggin, 4), and that it was “unnecessary and unworkable [and] just to pander to the vanity of the Leader of the Opposition” (Abbott). So what are the pros and cons, and should the agreement have even been passed? According to the government, Australia can expect the following: • Free and open access to the $270 billion US market for Australian exporters. • 66% of tariffs being eliminated completely • Legal protection for Australian service providers in America to ensure to discrimination against their product. • And the most impressive fact of all: it is calculated that it will boost Australia’s GDP by $6 billion a year. There is no questioning that these economic benefits are colossal. But are they worth the toll of the following cons: Beef Industry: The most public of concerns over the FTA were fears that it would be unfair to Australian cattle farmers who would, as the Australian Beef Association member John Carter said, “finish up just supplying low quality beef and live cattle” (Carter) and that the FTA would be a disaster for the Australian beef industry. Sugar Industry: The sugar industry was left out of the FTA altogether. In fact, because of the US election looming when the FTA bargaining was happening George Bush was unable to allow any Australian sugar subsidies into the FTA at all as that would damage his election performance. As a result John Howard was forced to create a tax-payer funded $440 million dollar package for sugar farmers so that “Some people will want to leave the industry” (Howard) because the FTA would have such bad results for sugar farmers. Environment: Under the FTA, Australia is forced to pay compensation to American investors if their profits are hindered because of environmental concerns. This means Australian governments will fear addressing environmental concerns such as tree-clearing because it could very well result in being sued for compensation. The same goes for human rights and labour standards as well as environmental protection. The President of the Australian Conservation Foundation and Labor Member for the seat of Kingsford Smith Peter Garrett said that “In reality, it will also have substantial negative and irreversible consequences for the health of Australia's environment, which we cannot afford to ignore” (Garrett). This is coupled with the possible quarantine problems. Quarantine: The FTA will allow the USA to create their own government run body for overseeing the inspection of imports into Australia from America. That means that we will have no control over any health restrictions that we used to impose before the AUSFTA. The US is boasting of this, as the website for the Office of the United States Trade Representative even reads, “Food inspection procedures that have posed barriers in the past will be addressed, benefiting sectors such as pork, citrus, apples and stone fruit” (USTR). In a senate inquiry this was noted: “Australia’s scientifically-based quarantine decision-making processes are the linchpin of our enviable status as one of the world’s leading disease-free agricultural producers… However, it is a fact that US agricultural producers intend to use the proposed Committee on Sanitary and Phytosanitary Matters and the Working Group on Animal and Plant Health Matters to pursue the reduction and elimination of Australia’s scientifically-based Sanitary and Phytosanitary standards” (Weis...