THE TRADINGEST ADMINISTRATION EVER:

The AUSFTA: Not Free Trade, But Close Enough (Alicia Burns, 06.02.04, Digital Freedom Network)

While far from perfect, the basics of this agreement call for Australia to end all agricultural tariffs, and for the U.S. to phase out most tariffs over time, with some ending in 4 years, others in 10 years, and some not ending for another 18 years. According to the United States Department of Agriculture, certain horticultural and beef products will be "safeguarded" before they are phased out in case of "significant price decreases on imports from Australia." Also, beef will be protected by "volume based safeguards during the transition period and price based protections in the post-transition period." Australia will end tariffs on: processed foods, oilseeds and oilseed products, fresh and processed fruits and fruit juices, vegetables and nuts, distilled spirits immediately, and the United States will immediately end its tariffs on processed pork and pork for processing.

Despite the inequities in the agreement, though, Australians are cheering the pact. Tim Harcourt, Chief Economist for the Australian Trade Commission called it a "new deal" for Australian exporters. According to Mr. Harcourt, the elimination of manufacturing tariffs will give all Australian manufacturers "unlimited access to the dynamic U.S. market" which will benefit small and medium sized producers. Additionally, the "lucrative government procurement market" worth an estimated $200 billion annually will give small firms, as well as individual professionals the opportunity to work with and for the United States easily.

The Australia-United States Free Trade Agreement is a step in the right direction, but it falls short of establishing true free trade relations between the countries. The powerful United States sugar, beef and other lobbying groups make truly tariff free relations between the United States and its trading partners nearly impossible. However, the benefits for Australia are significant, and if the agreement passes the legislature of both countries, it could be a first step towards an eventual genuinely free trade agreement.

All these pacts likely have to wait until '05, but large GOP majorities and no imminent election will guarantee their passage.

Posted by Orrin Judd at June 4, 2004 1:28 PM