Havachat: Free, fair or foolish? The Australian-US FTA - Day 1

Havachats are week-long email dialogues between two prominent advocates on an issue of the day. To vote on the issue and make your view count, click here.

Day 1 . 2 . 3 . 4 . 5.

Doug won the toss and goes first. Alan responds.

From: Doug Cameron
Sent: Sunday, May 25, 2003 8:32
Subject: Australia should not become the 51st state of America

Dear Alan,

I guess you could sum up my opposition to the Free Trade Agreement along the lines that Australia must not become the 51st state of America. This FTA has the potential to destroy our unique culture, our economic independence, and our capacity to have a modern manufacturing industry capable of providing diversity and added value to the economy and the nation.

Not only that but it will exacerbate the structural imbalance in our economy by weakening our manufacturing base and consigning Australia to no more than a quarry, a farm, or a nice place to visit.

What I want is "fair trade". A policy that enhances employment growth; social justice; core labour standards; environmental protection; and the advancement of democracy.

The (USFTA) will not advance the social and economic position of the majority of working Australians. Worse an "everything on the table" free trade agreement or "regional integration agreement" as you like to call them Alan will cost Australians dearly in terms of the ability of future governments to meet their economic, social and cultural policy responsibilities.

Illusory Gains

Proponents of the USFTA rely on a Centre for International Economics (CIE) study to argue that a USFTA could lead to a $4 billion gain for Australia. Nobody seriously believes this gain will be realised. The gain was rejected by an ACIL Consulting study commissioned by the government. The ACIL Consulting report found that a USFTA would actually harm Australia. Even neoclassical economists like Ross Garnaut have rejected the findings of the CIE report. The AMWU and others have also criticized the unrealistic econometric assumptions underpinning the CIE study.

Even if we accept the dubious gains - the CIE study suggests only that GDP will be 0.4% higher in the long run for full liberalisation, including agriculture. This is a tiny gain for what will be asked of Australia.