Concerns from Crikey readers on the Australia – United States Free Trade Agreement:
The FTA will leave us economically worse off
In the long run this compromised FTA will do more damage to Australia’s
trade effort. The simple reason being that as more and more
discriminatory trade deals are done, the potential for increases in
global trade are diminished – Australia is now overtly complicit in
this whole misguided movement. Relatively, Australia is one country
that is inevitably going to be economically worse off as a result of
this and the other discriminatory FTA deals recently done or currently
being contemplated because Australia relies extremely heavily on trade
for jobs, government revenue in the form of company and personal income
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Australia should be aiming much higher. Multilateral FTAs are the way
to increase trade and economic prosperity around the world, not to
mention the general diplomatic goodwill that such agreements engender.
Australia should be getting behind the WTO and its efforts to foster
multilateral free trade.
As a country with relatively good trade credentials, Australia has now
severely damaged its future prospects to play a full part in the fast
growing economies of Asia. It is in Asia, not North America that
Australia should be focussing its trade efforts.
Undoubtedly, Howard will attempt to ‘sex-up’ the benefits of this deal
in the lead up to the election, just as he mislead Australians at the
last election to the detriment of our international standing.
Vaile caved in on intellectual property
It’s probably not a big issue to the voters, and publishers probably
are happy, but the FTA gives away everything the Americans wanted on
intellectual property. Not just the increased duration but “tighter
controls on circumventing technological protection…..as well as other
measures in relation to circumvention tool”, “increased criminal and
civil protection against the unlawful decoding of encrypted…….”
“agreed criminal standards for copyright infringement……”
So exactly how does extending protection to 70 years after the author’s
death increase creativity, or increase investment in creativity, or
improve the income of anybody creative? And why do I (a suburban
medical specialist) care?
One issue, at the core, is the lack of any communal ownership of
literary cultural icons. Literary works which still have economic value
100 years after creation, have cultural value. Focusing only on the
economic value makes our history private property. For instance, which
parts of the Fairfax archives they choose to release to the public, or
whether a film with insensitive portrayal of aboriginals is available
Large owners of film or book copyright manage their libraries using a
5-10 year investment horizon, which may include suppression of some
works to promote others, or censorship for purely economic reasons.
Micrsosft has a digital content model which would require on line
authentication for every use of a document. They are down playing the
capacity of this to permit revocation but it is clearly there. The
treaty agreements proposed form a legal framework in which a document
could be created, and distributed, and at the whim of the copyright
owner, all copies destroyed, and any attempt to circumvent that
destruction would be a criminal offence.
You think maybe the recording industry is a little heavy handed in how
it is addressing music piracy? You think maybe the linux people are
zealots? They are, (a possibly so am I) but it doesn’t mean they are
The danger of aligning our minds with the US
One aspect of the FTA that is apparently being under reported is the
commitment that Australia will align its Intellectual Property (IP)
laws with the US. DFAT’s website states the FTA “harmonises our
intellectual property laws more closely with the largest intellectual
property market in the world, which is recognised as a global leader in
innovation and creative products.”
The US copyright and patent laws are globally recognises as a joke, and
Australia is harming itself if it follows down this path. It rewards
large companies by giving them huge control, slowly eroding away the
remaining fair use provisions the consumer currently has. Simple fair
use rights like recording TV shows and watching them later could not
only be illegal, but technologically prohibited in next generation
Time and again, new laws are introduced in USA that seem to cater for
one interest group – big corporates. Be it the Digital Millenium
Copyright Act, copyright extensions, or software patents – none of them
are designed to benefit the consumer.
The DMCA prevents circumventing copy protection, but is interpreted so
loosely that it is used to silence critics and undermine legitimate
research. Countless examples exist of this at the Chilling Effects website.
So called “software patents” are allowed in the US, which encourage
companies to patent seemingly obvious computer methods like clicking a
button on a website, and then litigate against anyone who does that
same. One recent example is a company Eolas patenting the concept of
embedding animation in a webpage. They successfully sued Microsoft for
$US520 million and Microsoft will have to remove this functionality
from future versions of Internet Explorer.
Copyright extensions in the US have effectively created a situation of
perpetual copyright for 20th century works. Copyrights were designed to
give the creator rights over their work for a limited time, and then
revert to the public domain – such as a certain period after the
author’s death. Successive extensions in the US have extended copyright
limits well beyond those originally envisaged.
The latest extension was dubbed the “Mickey Mouse Protection Act”,
because it extended copyrights just in time to give Disney a longer
hold on Mickey Mouse. Without copyright extensions, Disney’s characters
from the early 1900s should revert back to the public domain. The irony
is that Disney makes most of its money using IP it gets for free
because it _has_ reverted back to the public domain – fables and fairy
tales by the Brothers Grimm and others, or even stories as recent as
Winnie the Pooh.
It was not long ago that Australia was lauded for encouraging fair use
rights when the ACCC supported “region-free” DVD players – allowing you
to play DVDs in Australia that had been bought in the US or the UK. One
can be certain this is at complete odds with American’s IP laws and
would be illegal circumvention under them.
Overall this is bad news for technological innovation and consumers. It
rewards large media companies by reducing consumer choice, creating an
increasing stranglehold over content and distribution. Let’s hope the
risks become public and Australia wakes up to the huge downsides of
Australia’s IP tradeoffs
One sweetener the US received that hasn’t attracted much media
attention yet is the extra intellectual property protections that we’ve
signed up to: US Aus FTA – Intellectual Property
Amongst the nasties contained here is an extension of copyright terms
to match those of the US (so we keep paying for Gone With the Wind and
Rhapsody in Blue for another 20 years), and “tighter controls on
technological circumvention measures”. That gets into rather
complex technical issues, but it could mean tighter restrictions on
technologies like multi-zone DVD players, that let us play American,
European, or Japanese-market DVDs on our players (and thus bypass the
movie industry’s attempts to segment the market – further tightening
trade in this sector rather than freeing it up). While there is a
mention of “public interest exceptions”, I would find it very
surprising if the US doesn’t push to minimise those.
While DFAT of course claims that this part of the deal will benefit
Australia, we are a huge net importer of American IP, will remain so,
and this deal will only further tilt the trade balance in this area
away from us.
Just another thing to keep in mind when looking at the totality of the deal.
The USA’s gain is Australia’s loss
Like so many vaunted documents of similar ilk, the FTA will turn into
nothing of consequence at the end of a lot of
self-aggrandisement. Yes, there will be concessions and yes there
will be tariffs wiped off immediately. But take a deeper look and
segment the impact of those.
If you go to the APEC Tariff Database
you can register and see precisely what levels of tariffs have been
dropped. Not outstanding, and given beef has a 16 year wait to
eliminate tariff levels completely, it will be totally irrelevant.
Currency considerations. The shift in the A$ to 6 year highs has wiped
off the marginal benefit that a FTA could have brought. We do not
currently supply the total volume of some of our existing market access
anyway. Other countries have developing nation status and labour costs
that mean Australia cannot compete with the commodity prices of those
countries even with unrestricted access.
Consider a FTA that gives Australian manufacturers access to the USA’s
massive Sports Utility Vehicle market. This market is dominated by BIG
and remember the USA has dropped the Kyoto Protocol and all other fuel
efficiency requirements, so there are no considerations that interfere
with the BIG concept. How many 1 tonne capacity large size SUVs does
Australia produce? None. The Holden and Ford utility types do not fit
this market. The market leaders are Ford and Chevrolet with a
smattering of vehicles produced in Asia providing the balance.
The whole FTA is a warm fuzzy promised by a President and a Prime
Minister as a reward to each other. It has been cobbled together by a
bureaucracy who has been told to deliver something. It is being sold as
beneficial but uses economic figures that are not new trade, rather
they are a rehash of existing trade that is currently carried out with
other countries. Any gain can only be by better pricing structures,
something killed outright by a strong A$.
The Australian Government makes no mention of concessions within the
Pharmaceutical Benefits Scheme yet the USA claims there are. There is
no sugar concession, yet the Howard Government have indicated they will
probably now provide support to the Queensland sugar industry to
compensate. Additional TV access is claimed by the USA. Does this mean
more Murdoch, Fox, O’Reilly, Coulter, and more Hannity and Colmes?
Surely even the Australian Prime Minister would find that a touch hard
After all the mutual adulation has been erased by reality we will hear
no more for there is nothing of substance to hear. It is an exercise in
self-marketing for two leaders who want anything to talk about in an
election year but WMDs.
The lack of informed commentary on the FTA
Hookesy’s death and the FTA have one thing in common – surrounding both
is a gaggle of commentators who know nothing of the facts but are
desperate to expose their assembled fantasies to an avid audience.
Unfortunately, those few who might know what is going on with regard to
the FTA have agendas that are not stated. For instance: lobbyist Alan
Oxley seems quite prepared to see the agricultural sector sunk as long
as manufacturing gets a run (ref: The Country Hour, ABC, 9-2-04); the
DoT says increased two way trade is by definition beneficial whereas
the reality is that the balance of trade is far more important over the
long term as it has a direct influence on unemployment and all that is
implied by that; Australian sugar producers are now out of the
agreement and as a result expect imminent federal rescue, but although
they are not tremendously efficient and resist change in production
methods they can still thrash Jed Bush’s sugar-grower electorate in
Florida; and whereas PM Howard, Deputy PM Anderson and Minister Vaile,
although weeping for agriculture on television, profess themselves
pleased to get an FTA as any outcome is better than none, but in the
meantime and while this remains to be seen, our increasingly cynical
electorate will be subjected to another hard sell program like those we
have come to expect from our current government when really Australia’s
basic interests are not those of the politically burning Bush.
That the devil is always in the detail is a truism too often forgotten.
Certainly it will be found to be as true in the case of this FTA as it
was in the NAFTA and as the Canadian manufacturers found to their
surprise and the Mexican workers to their distress. As some details
become available and more specific it seems Australian agriculture will
be the main loser in this case. That Australian negotiators accepted or
were only able to achieve (who knows which?) improved access to the
American beef market that is proportionately LESS than that market’s
present annual growth, that it will take over 18 years to achieve this
and that there is NO increase for the first two years is a pathetic
outcome, more so given the American problem, both short and long term,
with providing its population with beef free of Mad Cow Disease.
Australians need to know a great deal more than they have been told
about this FTA. The danger is that the government will obfuscate and
its argument will be accepted by the electorate at face value.
Politicians generally are not good at getting on top of detail and past
experience suggests that it is only after the matter has come before
the Senate that the detail will become better understood; but first
impressions are often hard to shift and by that time it may be too late
for the electorate.
The detail must be released now and in full.
An academic and ecological view on the FTA
I would be interested in the briefing notes, all my reading on the
topic and being on a number of enviro list servs is best summed up by
the experience of the Canadians NAFTA only really benefits the 600lb
gorilla and it sits wherever it wants to.
I understand that the whole emphasis on bilateral FTAs rather than
working with the WTO is to enable the US corporations to do whatever
they want to, I get the impression it is similar to the really stupid
contracts the NSW government got into with the Sydney motorways, in
that anything the gov does that reduces the “growth of traffic” (which
would include car pooling, light rail, busways, or a congestion pricing
scheme like the very successful one in London) is then detrimental to
revenue under the contract and therefore actionable.
The main drivers of the FTA with Australia appear to be the
Pharmaceutical corps and the AgroChemical giants, there is also the
push with the WTO which could be also in the FTA to speed up the
privatisation of utilities. Ideologically the drivers are that
capitalism at a small-scale works, but at a larger scale it is more
like “parasitical corporatism”. The big corps are increasingly risk
averse, but need to keep expanding. These two characteristics mean that
they have to change the regulatory environment and move into
appropriating other income streams that can be exploited, namely the
provision of essential services. A book by Professors Nancy and
Bob Walker of UNSW looked at outsourcing in Australia, the rough
figures from memory were 4 cost positive, 12 cost neutral and ~200 cost
If the current futures perspective on resources population and energy
by organisations such as the CSIRO Futures by Barney Foran, the
Ecofootprint work by Rees and Wackernagel and the World Watch Institute
State of the World Reports, and the IPCC are correct, the world will
have to reduce its environmental impact by 80-90% by 2050.
This is also supported by Graeme Pearman’s (former head of CSIRO
Atmospheric Research) paper for the on-line ISOS conference where he
talks about the need to reduce Greenhouse Gas emissions by at least 80%
NAFTA and the Aus/US FTA is about increasing trade, the many articles
and books coming out on the mid-depletion point of the liquid fossil
fuel reserves since the seminal work by Dr Hubbert in the 1960s
increasingly point to a mid depletion point of 2004-2010 for crude oil,
around 2012-2015 for LPG and 2020 for LNG, (Campbell, Fleay et al, ref
available on request) this will in fact require a complete rethink of
our economies and head us back to a local self-sufficiency in food and
Although there is a huge financial input into the hydrogen economy /
transport technologies, the transport /construction fuel costs are
likely to 3-5 times higher than at present and there are a number of
modelling studies underway that indicate that H2 will have its own
negative environmental effects (in terms of a Greenhouse gas as H2 and
the output of combustion or fuel cells as H20) even if only derived
from renewable sources.
One of the large drivers in Australia of the FTA is the farming sector.
They are being totally unreal as to the existing environmental impacts
of the resource extraction called broadacre farming. Extrapolating
research work such as – the water budget work (1tonne of wheat =
1,000tonnnes of water) by Charles Sturt Uni and others, CSIRO
sustainable ecosystems, and the unresolved problems of falling carbon
in the soils, depleted micronutrients, excesses of phosphorus and
nitrogen entering the rivers, dryland salinity on the increase,
clearing still going on, soil acidity and decreasing rainfall of up to
40%, it is really a delusion that we can continue the one-way export of
carbohydrates, calcium, phosphorus, nitrogen and all the other
finite materials. As John Williams Head of Land and Water Division of
CSIRO said to me at a conference, “Australian soils do not have the
capacity to sustainably produce carbohydrates, essences and oils, yes.
In all I believe the FTA is bad for our culture (cultural imperialism
of US TV, Movies and Ads) bad for our economy, and bad for our
Text Book Dave
The FTA as an election sweetener
Forget the real economic impact of the Free Trade Agreement (FTA) the
fact is that this agreement was designed to be a political document
both by President Bush and also Prime Minister Howard. Both are facing
election this year and both were trying to shore up supporters.
The agreement demonstrates beyond doubt the desperation the PM is
feeling. John Howard’s Government holds Government with an eight seat
majority and this agreement places in doubt 5 marginal “sugar” seats
and more importantly gives further momentum to the Latham ALP
resurgence. Howard has surely misread the ability of corporate Liberal
supporters to talk up this issue and John Anderson must now surely
regret the comments he made regarding any agreement not including sugar
to not be in our interest. Anderson’s comments will come back to haunt
the coalition in this election year and the FTA may well be the turning
point in the lead to an election the PM probably now wishes he avoided
Playing with the big kids
Well this is what happens when the ‘Deputy Sheriff’ tries to negotiate
with Uncle Sam. We get lumbered with a second rate trade agreement. The
PM caves in and gives the Americans everything that they wanted.
Leaving aside what we don’t know about PBS and Media content, the one
thing that we were after, the whole reason why we set up the Cairns
Group in the first place was to export more food and Howard just walks
away from it. You’d think in an election year, that the PM would at
least pretend to be the one who wears the pants in his house, but no.
The Arselicker just won’t stand up to the Americans. Why can the Yanks
now sell us all the food that they want, but we can’t do the same in
return? You know, Free Trade.
And if the reports are right, the worse thing about this is now the
Americans will be allowed to by-pass our strict quarantine laws. Since
the Yanks have let their standards drop, and now have Mad Cow disease
in North America, what’s going to stop them importing it here?
“The Blacktown Beancounter”
Inferior USA imports – buy Australian instead
The Yanks may continue to flood Australia with shoddy or over
engineered defence & manufacturing products, “C” grade films &
dumbed down TV shows plus their “mad cow” tainted beef and insecticide
covered sugar cane but they can’t make Australian buy their rubbish.
Buy superior Australian farming and manufacturing products.
FTA – in the fine print?
We need to know more about the reduced role of the FIRB. I understand
there has been a substantial lifting of its threshold for foreign
investment review and this needs to be examined carefully. There was
just a brief mention of this on the ABC, nothing else I’ve seen. Wonder
if this is why the Murdochs (ie. big business in the USA) are so
supportive. Can Crikey.com.au look at this?
Poor media response to the FTA
Just a comment on the extreme shallowness of media coverage on the proposed US FTA. The in depth analytical 7.30 Report last night (9/02/04) managed not to mention:
- The importance of the US as a trade partner to Australia,
- Our trade deficit with the US
- Who else has an FTA or trade arrangement with the US (Not yet Australia)
- All the countries which have trade agreements with the European Union (Not Australia)
The Financial Review today (10/02) and Gerard Henderson’s article in the SMH
today (10/02) are much better. The rest of media comment has been
woeful. In other countries (eg even China) the TV would show graphics
on Australia /US trade, trade growth, the global trade picture and give
some solid historical background. Our media seems to have evolved to
some sort of level where political and economic news is treated with
the analytical skill level of Who Weekly, ie.”‘what is Mark Latham wearing today?”
We know Mark needs the five Queensland seats but why are the media
acting as if only Australia has a sugar lobby group? Wouldn’t thinking
about it for one minute make anyone realise that the US Congress have
their own lobby groups to contend with? (Hello – didn’t any of
these seasoned political types even see the movie where “Legally
Blonde” goes to Washington?) Even if we leave out journos who
know anything about trade and economics and just settle for a journo
who keeps up with popular culture, we would have a journo who realises
that the US Congress works by balancing interest groups. The US has
never previously given much away at all to Australia in trade
concessions, this is a breakthrough and so do we really think Mark
Latham would have been a more successful negotiator with his background
in. oh what was it again, oh yes … local government and
political staffer. (In addition of course to Great Thinker.)
Are we going to end up like New Zealand? Totally isolated with no one
to trade with and no one to ally with. What would have happened if
Black Jack McEwen’s groundbreaking postwar trade agreement with Japan
had been blocked by the Senate? I hope for the sake of our country we
can all grow up and give Australia a world future.
Sugar and the FTA
Only two words need be said about sugar and the FTA:
- Cuba (especially when Castro goes).
Anybody who thinks the USA market could ever be the salvation of
Australia’s sugar industry has rocks in their head. Likewise,
theextremely greenhouse-unfriendly ethanol.
Could somebody please tell Queensland sugar producers (and ‘Mad Bob’
Katter) to get a grip on reality, and then check out the market
potential for sugar in China and India.