Aussie-U.S. Trade Deal Reached

Sugar is exempted from the trade deal. Despite NCBA's cry that exempting products sets a bad precedent, Dakota senators urging beef to be exempt as well. Compiled by staff

Published on: Feb 9, 2004

U.S. and Australian officials have hammered out a new trade agreement that ends manufacturing tariffs but keeps some restrictions on farm products. The biggest winner is the U.S. sugar industry, which was kept out of the deal. Arguments over sugar imports threatened to derail the entire deal.

Australia has said they wanted sugar included in the deal, but ultimately backed away from that demand. The sugar industry has fought any liberalization of trade between the U.S. and Australia, fearing further losses in an already competitive market.

While the Australians pushed hard to get sugar included in the agreement, and going as far as saying that leaving out sugar would be a deal-breaker. In the end sugar was left out. "The pervasive government intervention that has grossly distorted the world market for sugar is a global problem and can only be effectively addressed in the [World Trade Organization] negotiations, not in a piecemeal fashion in bilateral or regional FTAs," says Carolyn Cheney, chair of the U.S. Sugar Industry Group.

In policy decisions made at the 2004 National Cattlemen's Beef Association (NCBA) Annual convention, members newly resolved that all products in all sectors should be included in trade agreements that the U.S. negotiates. They agreed that the U.S. should not allow provisions that will have the effect of excluding products or similarly limiting our negotiators' flexibility, as it establishes a dangerous precedent in trade agreements. Such a precedent could allow foreign governments to negotiate trade agreements which do not provide complete liberalization for U.S. beef exports.

But, South and North Dakota Democrat congressmen Tom Daschle, Tim Johnson and Bryon Dorgan sent a letter to President Bush requesting that beef also be exempted from the trade deal. The letter explains that the trade agreement would open the United States to import competition without creating opportunities for the U.S. beef market.

Congress and Australia's cabinet must approve the U.S.-Australia deal. Some predict the deal, when approved, could boost U.S. exports by $1.8 billion annually. And Australian exports to the U.S. will also increase.