Ausfta Free Trade Agreement

11 Sep Ausfta Free Trade Agreement

Concern over the Pharmaceutical Benefits Scheme has sparked speculation that the United States would make a firm commitment to repeal it as part of a free trade agreement. The government has been criticized, particularly by Australian Democrats and Greens, for not doing enough to keep the Pharmaceutical Benefits Scheme running, accusations the government has vigorously rejected. Some academics (such as Thomas Alured Faunce) have claimed that the provisions of the agreement would lead to an increase in the price of PBS drugs. However, the relevant text was effectively limited to the issue of process and transparency and did not contain any provisions that might affect the price, which ultimately did not turn out to be the case. Australia as a whole relies heavily on the primary sector and the main benefits of a free trade agreement between the two countries have been seen as better access by Australian producers to the large US market, but heavily subsidised and protected. The National Rural and Regional Party, in particular, has made a strong commitment to extend the agreement to sugar exports. The final provisions of the agreement did not go as far as expected and, as a result, some sugar industry lobbyists, particularly the independent Bob Katter, insisted that the free trade agreement be rejected. However, many, like Queensland Premier Peter Beattie at the time, still felt that the agreement represented a net benefit to Australian agriculture and supported ratification on that basis. According to Shiro Armstrong, of the Crawford School of Public Policy at the Australian National University, he concluded that more than 10 years of data from the Productivity Commission showed that Australian and US trade with the rest of the world was declining because of AUSFTA, after controlling for country-specific factors – that there was trade diversion. Estimates also indicate that trade between Australia and the United States has declined in the context of AUSFTA implementation, even after controlling for country-specific factors. [15] Shiro Armstrong also concludes that Australia and the United States have reduced their trade with the rest of the world by $53 billion and are worse off than they would have been without the deal. [16] Following the signing of the free trade agreement, there was initial concern that the U.S. agricultural sector would press against the agreement, fearing that it would intervene in the government`s agricultural subsidy program.

However, the deal, which restricts imports of Australian agricultural products such as beef and sugar cane, has eased concerns in the US agricultural market (while many Australian producers have been heavily frustrated). The agreement became an important political theme on the eve of the 2004 elections. After a long period of negotiations under the leadership of Howard`s Trade Minister Mark Vaile, the deal was strongly supported by the Howard government as a huge potential benefit to the Australian economy and essential to the continuation of the US-Australia alliance. This agreement also improves Australia`s services, trade and investment prospects, improves the regulatory and investment environment between the two countries and fosters increasing business mobility. . . .