US, Australia free trade deal/australian farmers

Grant Lee grantlee at iinet.net.au
Sun Nov 24 03:43:34 PST 2002


I tend to take the view that the free trade deal --- assuming it actually happens -- is a pay off for the (conservative) Howard government's support of the so-called war on terror. One piece of evidence for this is the retooling of the Australian Defence Force over the last 12 months, towards a colonial wing of the US military industrial complex, rather than the regionally-focused force favoured by previous governments.

More importantly, since Australia is already one of the most open economies in the OECD -- almost a one way free trade area --- and the US has _never_ had a negative balance of trade with Australia, there can be few advantages for few US businesses. The big winners will be the seriously sick Australian agricultural sector, from small farmers up to the multinational pastoral proprietors mentioned by Thiago. These happen to be the proprietors of a strategic sector of the Australian economy and prime consituents for the Howard government. And given the miniscule volume of Australian exports to the US, even a doubling of these would have few serious consequences for the US economy as a whole.

NB. On the point of subsidies: US agribusiness lobbies have complained about statutory monopolies, such the Australian Wheat Board, as being market-distorting interventions (at the same time as successive US administrations have inflicted far more significant direct subsidies). Nevertheless, Australian agriculture is almost completely unsubsidised --- the sole exception are the sugar producers in North Queensland, who happened to straddle marginal electorates in the early 1990s and were bought off by the last (Labor) federal government. These sugar subsidies are often excused by reference to the even more generous corporate welfare offered to sugar producers in Florida (et al).



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