NAWG Against Australian FTA

Wheat growers unable to support trade agreement because it doesn't end the export monopoly they believe the Australian Wheat Board maintains. Compiled by staff

Published on: Mar 9, 2004

With struggling world free trade talks, the United States is actively pursuing bilateral agreements with countries. The latest for the U.S. is a free trade agreement with Australia. As commodity groups begin to examine the details of the deal, a number of issues are being raised about the package.

The latest commodity group complaint comes from the National Association of Wheat Growers (NAWG). The association says the agreement falls short of its goal of ending the export monopoly of AWB Ltd. (the Australian Wheat Board).

"NAWG believes that fair competition for wheat sales is undermined by monopolistic state trading enterprises such as the AWB and the Canadian Wheat Board," says NAWG President Mark Gage, who farms near Page, North Dakota. "The world wheat market - both buyers and sellers - will be better off when they are dismantled."

NAWG's main goal of the agreement was reform. Although total reform wasn't achieved, U.S. negotiators were able to secure an agreement from Australia that they would work to "develop disciplines on an entity's right to export" in a multilateral context at the World Trade Organization (WTO). The wheat group says this statement is a significant change in the prior Australian position, and supports a NAWG policy goal to negotiate STE disciplines at the WTO. It also leaves Canada isolated as the only major competitor opposed to negotiating such disciplines.

In a statement NAWG explained their delayed response of support with the agreement derives from the conflict between their two goals -- ending the monopoly vs. negotiating disciplines at the WTO. NAWG's International Policy Committee, which includes representatives from both the Wheat Export Trade Education Committee (WETEC) and U.S. Wheat Associates (USW), addressed the perceived conflict and settled on the position of not supporting the agreement.

"The domestic wheat industry had little to gain from a free trade agreement with Australia, as we are fierce competitors in wheat sales to third country markets. Chances of either nation shipping wheat to the other are slim," the statement says. "Australia's position on negotiating STE disciplines is very similar to the US position on negotiating trade-distorting domestic supports; that it will not be done in a bilateral agreement, but can be addressed in WTO talks."

NAWG's International Policy Committee met late last week with a representative from the US Trade Representative's (USTR) office to discuss the agreement, to learn the details of the STE discussions, and thank USTR for their dedicated work in advancing this point. NAWG believes that the STE language is a significant step forward - perhaps all that could have been achieved on this point in a bilateral agreement - but is not enough to win the wheat industry's active support of the agreement.