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U.S.-Australia FTA Overview.Despite strong opposition from U.S. dairy producers, sugar beet farmers and ranchers, and after a deadline extension, the U.S. Trade Representative’s Office completed negotiations with Australia for an U.S.-Australia Free Trade Agreement on February 8, 2004. The U.S. removed sugar issues from the negotiations in an apparent move to appease U.S. sugar producers who are already concerned about the Central America Free Trade Agreement (CAFTA). Trade ministers from both countries signed the deal on May 18th. The U.S. Congress and the Australian parliament must both approve the agreement before it can go into effect.
The US-Australia FTA threatens farmers and workers in the US in several regards. It would immediately remove tariffs on several commodities important to small farmers, including beef, sheep, wheat, and cereal flour mixes. Dairy farmers and ranchers could lose their farms as quotas on dairy and beef products are phased out. In particular, the deal would open the U.S. market to imports of milk protein substitutes, a dairy waste product that many U.S. dairy farmers do not even consider fit for human consumption, and which the Food and Drug Administration doesn't list as an approved food ingredient. The agreement would also result in a drastic increase of “runaway” film production to Australia where labor costs are cheaper.
The agreement has angered many Australians, especially because of threats to the country’s Pharmaceutical Benefits Scheme (PBS). Even though the PBS is lauded as a top health-care system, under the deal Australians would have to pay more for prescription drugs. The agreement focuses on the “rights” of pharmaceutical manufacturers while neglecting the rights of consumers to have access to affordable drugs. Services in Australia would also be open to privatization under the agreement unless specifically excluded. The US Trade Representative’s office says “Australia will accord substantial market access across its entire services regime, offering access in sectors such as telecommunications, express delivery, computer and related services, tourism, energy, construction and engineering, financial services, insurance, audio/visual and entertainment, professional, environmental, education and training, and other services sectors.”
More Questions Than Answers
A Quick Analysis of the USTR Press Release on U.S.-Australia FTA, July 8, 2004
Ten Devils in the detail of the USFTA
The Australian Fair Trade and Investment Network, March 2004
Australia FTA: Undermining our Agricultural Markets
Fact sheet from WORC, February 2004
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