Catch22
02-09-2004, 04:48 AM
US and Australia clinch trade deal
The United States and Australia have unveiled an "historic" multi-billion dollar free trade pact after an Australian climbdown in a row over access to US sugar markets which almost scuppered a deal.
Australian Prime Minister John Howard signed off on the tariff-busting pact during a telephone call on Saturday with President George W Bush, aware that his decision would spark a domestic political backlash.
"This is the most significant immediate cut in industrial tariffs ever achieved in a US free trade agreement, and manufacturers are the big winners," said US Trade Representative Robert Zoellick.
It is the first free trade deal negotiated between the United States and a developed country since a US-Canada pact in 1988.
Australian Trade Minister Mark Vaile said the deal, clinched after two weeks of gruelling talks, would give a leg up to Australian firms keen to reap the benefits of the world's most dynamic economy.
But Howard took a battering, as critics claimed the US got the best of the bargain after keeping Australian sugar out of its closely guarded markets.
Howard's government had repeatedly warned there could be no deal unless it included all trade sectors.
"What I faced over the weekend was a decision as to whether we were going to scupper a deal that gave enormous benefits to the rest of the economy because we couldn't get additional access for the Australian sugar industry," Howard said.
Opposition Leader Mark Latham slammed the deal as bad for farmers and not in Australia's interests.
Mr Latham said Labor could not accept it because it failed to tackle agricultural reform, while there were questions over the detail covering areas such as the Pharmaceutical Benefits Scheme.
"This deal doesn't appear to be in Australia's national interest," he told reporters.
"Quite frankly, our farmers have been dudded."
He was backed by the National Farmers' Federation president Peter Corish who said apart from an improvement in dairy and horticultural access, farmers had not done well from the deal.
"Unimpeded access to the US market for agriculture was not achieved," Corish said.
Zoellick had earlier made the US position crystal clear, saying that before negotiations started he had told Howard the US was unable to include sugar in the deal.
"The Australian side pressed very hard, as is their right to do," he said, arguing that Australian producers already had a "sizable" quota on exports to the United States.
The powerful US farm lobby had exerted intense pressure on Bush for no concessions on sugar in key agricultural states which could be crucial to his reelection effort in November.
The US and Australia will grant one another immediate duty-free market access to most manufactured goods and services when the deal is signed and ratified.
Australia will get improved access for agriculture with above quota duties on beef being phased out over 18 years.
Some 66 per cent of Australian agricultural goods will see tariffs reduced to zero on day one of the deal.
US farmers in turn will get duty-free access on $US400 million ($A522.4 million) of exports to Australia, and US telecommunications, computer, energy, tourism, express delivery and other service orientated firms will win substantial market access.
Australia also agreed to make adjustments to is Pharmaceutical Benefits Scheme, which subsidises the cost of medicines and promotes the use of generic drugs.
US drugs giants say the system unfairly rigs the market price for their product and does not allow them to recoup the cost of research and development.
The US Chamber of Commerce says the deal could boost US gross domestic product by more than $US2 billion ($A2.6 billion) a year by 2006 and hike US exports by $US1.8 billion ($A2.35 billion).
Australia estimates a free trade agreement minus the sugar sector could boost the Australian economy by more than $US1.5 billion ($A1.96 billion) a year.
Negotiators were working in a shrinking window of opportunity, as it was questionable whether the Bush administration would have revisited such a politically sensitive issue during the run-up to the president's re-election battle in November.
Some in Australia see the trade deal as a payoff for Howard, who supported Bush in the Iraq war, despite stiff domestic opposition.
Trade between Australia and the United States hit more than $US28 billion ($A36.57 billion) last year.
The United States and Australia have unveiled an "historic" multi-billion dollar free trade pact after an Australian climbdown in a row over access to US sugar markets which almost scuppered a deal.
Australian Prime Minister John Howard signed off on the tariff-busting pact during a telephone call on Saturday with President George W Bush, aware that his decision would spark a domestic political backlash.
"This is the most significant immediate cut in industrial tariffs ever achieved in a US free trade agreement, and manufacturers are the big winners," said US Trade Representative Robert Zoellick.
It is the first free trade deal negotiated between the United States and a developed country since a US-Canada pact in 1988.
Australian Trade Minister Mark Vaile said the deal, clinched after two weeks of gruelling talks, would give a leg up to Australian firms keen to reap the benefits of the world's most dynamic economy.
But Howard took a battering, as critics claimed the US got the best of the bargain after keeping Australian sugar out of its closely guarded markets.
Howard's government had repeatedly warned there could be no deal unless it included all trade sectors.
"What I faced over the weekend was a decision as to whether we were going to scupper a deal that gave enormous benefits to the rest of the economy because we couldn't get additional access for the Australian sugar industry," Howard said.
Opposition Leader Mark Latham slammed the deal as bad for farmers and not in Australia's interests.
Mr Latham said Labor could not accept it because it failed to tackle agricultural reform, while there were questions over the detail covering areas such as the Pharmaceutical Benefits Scheme.
"This deal doesn't appear to be in Australia's national interest," he told reporters.
"Quite frankly, our farmers have been dudded."
He was backed by the National Farmers' Federation president Peter Corish who said apart from an improvement in dairy and horticultural access, farmers had not done well from the deal.
"Unimpeded access to the US market for agriculture was not achieved," Corish said.
Zoellick had earlier made the US position crystal clear, saying that before negotiations started he had told Howard the US was unable to include sugar in the deal.
"The Australian side pressed very hard, as is their right to do," he said, arguing that Australian producers already had a "sizable" quota on exports to the United States.
The powerful US farm lobby had exerted intense pressure on Bush for no concessions on sugar in key agricultural states which could be crucial to his reelection effort in November.
The US and Australia will grant one another immediate duty-free market access to most manufactured goods and services when the deal is signed and ratified.
Australia will get improved access for agriculture with above quota duties on beef being phased out over 18 years.
Some 66 per cent of Australian agricultural goods will see tariffs reduced to zero on day one of the deal.
US farmers in turn will get duty-free access on $US400 million ($A522.4 million) of exports to Australia, and US telecommunications, computer, energy, tourism, express delivery and other service orientated firms will win substantial market access.
Australia also agreed to make adjustments to is Pharmaceutical Benefits Scheme, which subsidises the cost of medicines and promotes the use of generic drugs.
US drugs giants say the system unfairly rigs the market price for their product and does not allow them to recoup the cost of research and development.
The US Chamber of Commerce says the deal could boost US gross domestic product by more than $US2 billion ($A2.6 billion) a year by 2006 and hike US exports by $US1.8 billion ($A2.35 billion).
Australia estimates a free trade agreement minus the sugar sector could boost the Australian economy by more than $US1.5 billion ($A1.96 billion) a year.
Negotiators were working in a shrinking window of opportunity, as it was questionable whether the Bush administration would have revisited such a politically sensitive issue during the run-up to the president's re-election battle in November.
Some in Australia see the trade deal as a payoff for Howard, who supported Bush in the Iraq war, despite stiff domestic opposition.
Trade between Australia and the United States hit more than $US28 billion ($A36.57 billion) last year.