FTA Deal Signed with Australia

Support dwindling in the ag sector for the deal that aims to increase agricultural markets. Compiled by staff

Published on: May 19, 2004

U.S. Trade Representative Robert Zoellick and Australian Minister of Trade Mark Vaile signed a landmark Free Trade Agreement (FTA) Tuesday that will eliminate more than 99% of manufactured goods tariffs between the two countries from day one, open services and agricultural markets, and further deepen their already strong economic ties.

Zoellick says the deal is expected to increase trade between the two nations by billions of dollars and creating more economic opportunity in both the United States and Australia. "The new FTA removes barriers to agricultural products, investment, government procurement, and services while increasing protection for intellectual property and freeing electronic commerce," he says.

But Zoellick continues that "much of this long race remains to be run" as respective governments must approve the nearly 1,300-page deal. Australian wires report that Democratic presidential candidate and Massachusetts senator John Kerry is unlikely to approve deal.

In addition, the New York Times reports that the Bush administration has been unable to persuade fellow Republicans in Congress to support the agreement. Democrats have sided with the administration, particularly because the two nations have "complementary standards that would benefit workers and the middle class" the Times reports.

Dairy farmers have been against the agreement. The National Milk Producers Federation says the agreement preserves most of America's existing dairy tariff structure, which represents a major accomplishment in light of extreme pressure by the Australians to completely open America's market to a flood of imports. However, the agreement does allow additional access to the U.S. market for Australian exports, although the economic impact of that concession is unknown.

The American Farm Bureau Federation has decided against supporting the measure. The Western Organization Resource Councils (WORC) also opposes the pact because it would end or phase out tariffs for many Australian agricultural products including beef, lamb, sheep, wool, wheat and dairy products.

The administration is expected to submit the agreement as early as next week for approval by Congress. Upon submittal of the pact, Congress has 60 days to debate and vote on implementing the agreement, but Congress cannot change any provisions in the agreement.

"It's time for Congress to step forward and put a stop to these 'free' trade agreements that are free in name only," says Karen Englehart, a rancher from Bison, S.D., and member of Dakota Rural Action. "It's time for Congress to take a good, hard look at what these agreements have done to our rural communities, independent business, and family agriculture, while enhancing the power and profits of the multinational corporations."