Sweet FTA!

The government is refusing to disclose the economic analysis showing how the Free Trade Agreement with the US will deliver net benefits to the Australian economy, leading many critics to argue that the agreement was signed blindly. Already the government, by buckling to US demands (particularly on agriculture trade), have greatly reduced the predicted $US2 billion a year windfall from the FTA, risking thousands of jobs, hundreds of businesses and our cultural identity in the process.

WEEK IN REVIEW

No sums done on trade deal: critics

The Federal Government's claims of an economic bonanza from the US free trade agreement are under intense scrutiny, as it conceded that cuts to US farm barriers were the smallest and slowest of any trade deal ever negotiated by Washington.

Full story: http://www.smh.com.au/articles/2004/02/11/1076388441174.html

Farmers count the high cost of US stonewalling

The value of the agreement has been slashed by up to $1 billion a year after the Australian Government agreed to the most miserly offer on agriculture ever proposed by the US in a bilateral trade deal.

Full story: http://www.theaustralian.news.com.au/common/story_page/0,5744,8636611%5E2702,00.html

Locals still wary of Hollywood muscle

After intensive lobbying that involved Toni Collette, Geoffrey Rush and Sigrid Thornton, the film and television industry was yesterday downbeat about the free trade agreement.

Full story: http://www.smh.com.au/text/articles/2004/02/09/1076175104455.html

700,000 wrongly caught in GST net

ABOUT 700,000 businesses are needlessly registered for the GST, contributing to the administration costs of $526 million a year, an Australian Taxation Office deputy commissioner says.

Full story: http://www.theaustralian.news.com.au/common/story_page/0,5744,8624483%255E643,00.html

Union delivers attack to Aust Post restructure plan

The union representing postal workers says today's industrial action at Australia Post in Sydney is because of the service's refusal to accept arbitration at the Industrial Relations Commission (IRC).

Full story: http://au.news.yahoo.com//040211/21/nocz.html

NEWS HIGHLIGHT

The Yanks are coming and there are big changes in store

The trade deal will make all things American a far more potent part of our lives, writes Jane Drake-Brockman for the SMH.

The Free Trade Agreement with the United States will change, at least at the margins, the direction of the next generation's lives. Culturally and economically.

It will not necessarily cut, at least not quickly, the prices we pay for goods and services in Australia. But it will probably alter, relatively quickly, the range and mix of consumer products and services available.

Where we have offered concessions to US companies that we do not give to firms from other geographic sources, we will see some gradual displacement in favour of US products in our supermarkets.

Where US firms are more efficient than ours, we will also see some gradual displacement of domestic firms. This will lead to new pressures for government assistance with the process of structural adjustment. Pressures of this kind will hit fastest in the digital content industries (such as audiovisual services and electronic games), where the outlook for local content is already uncertain.

The agreement is a signal to all sectors of the economy to adjust with the times; unless they are world's best practice, they will come under increased competitive pressure. This is because, whatever the agreement does or does not deliver on Day One, it does provide a platform for the continued pursuit, over the decades, of US commercial interests in our sensitive and protected sectors.

Equally, it provides a process for Australia's own continued pursuit of greater access to the American market, for example, in financial or professional services or government contract work.

Importantly, the agreement involves a significant and welcome liberalisation of Australia's foreign investment regime. The Government sensibly appears to be ready to implement this liberalisation in a non-discriminatory manner - for all investors, not only those from America. This will undoubtedly boost productivity in this country.

New job opportunities should open up in all sorts of foreign affiliates and subsidiaries which will now be able to establish themselves more readily in Australia.

So what does all this mean in concrete terms for the next generation of Australians? My five-year-old already speaks like a Power Ranger. All his toys, however, including his Power Rangers, are made in China. What is going to change?

Most of the toys will probably still come from China. We will, however, see some new North American products and services arrive on the market - Santa might put an American cotton T-shirt in his Christmas stocking this year.

My five-year-old prefers Playschool to Sesame Street. His children will have fewer Australian and more American programs to choose from over the years. But Australians will presumably continue to express political will to retain some local content so the next generation remembers that K is for Koala and not for Kansas.

My teenagers, meanwhile, are now more likely than before to study in the US. They are more likely to get jobs with US affiliates in Australia and more likely to explore job opportunities in America.

Their Australian degrees and professional qualifications are also more likely to be recognised in America and to give them entree to jobs and business travel in the US.

This deal is obviously not really about free trade. It has some liberalising thrust. This impact will be felt over time and across the board and will be difficult to attribute with certainty to any one event.

From a trade policy perspective, Australia will now have to push forward on a number of fronts.

First and most importantly, both the Australian and the US governments must work hard and fast to reactivate the stalled Doha Round of World Trade Organisation negotiations, from which this bilateral deal has unfortunately distracted both teams of scarce trade negotiating resources.

It is extremely important for any future potential WTO deal, especially on agriculture, for the US Government to act immediately to undo the negative message this FTA outcome is sending to the European Union and our East Asian trade partners in APEC, about US preparedness to liberalise on agriculture.

Simultaneously, the Australian Government will no doubt want, for balance, to push towards a possible trade agreement with China. And, of course, we have to implement this deal with the US.

There is no holiday to be had for Australia's hard-working trade negotiating team.

SATIRE

Care of our friends at The Chaser

www.chaser.com.au

BUSH STARTS WEAPONS INQUIRY: "Who supplied the faulty intelligence I asked for?"

WASHINGTON D.C., Wednesday: George Bush will set up a Presidential Commission to investigate the decision to go to war against Iraq, and establish who he can blame for it during this year�s election.

Yesterday, the US admitted it may never have gone to war if it had known those in the intelligence community could not be trusted to �find� illegal weapons.

"We told David Kay to �find� some weapons," said defence secretary Donald Rumsfeld. "Now I don�t know what �find� means to you, but the fact that he didn�t �find� anything demonstrates a complete lack of initiative. After all, we �found� tons of evidence beforehand, if you know what I mean."

White House aides said that as the search for illegal weapons wound down, the real search � to find someone to blame � was only just ramping up. They said an internal inquiry had already been conducted and the person who made Mr Bush�s Magic DecisionBall had been detained, "But it doesn�t stop there."

Insiders denied that the President was using the inquiry to deflect attention away from the lack of success in Iraq. "No, no. We�re using other things to deflect attention, like terror alerts and immigration laws."

Mr Bush lashed out at claims by anti-war protestors they are vindicated by the lack of WMD. �It�s very easy for them to be wise in hindsight about the fact they were right at the time.�

But in announcing the inquiry, Bush denied that he came up with the idea following Tony Blair�s total vindication in the Hutton inquiry.

"This will be a completely different type of whitewash."

Meanwhile, the President will also establish an inquiry into who borrowed the money that he requested in his budget that has created a $500 billion annual deficit.

For further information

Contact:   Chris Owen