1. US Free Trade Agreement leaflet and letter this week and Senate Submissions
2. Social policy fears over trade deal
3. Successful GATS Day of Action
4. AFTINET meetings with DFAT
5. New Report Shows Negative Impacts, Threats Of Water Privatisation
6. WTO fears Bush go-it-alone role

1. US Free Trade Agreement leaflet and letter this week and Senate Submissions

The Australia US Free Trade agreement negotiations begin this week, despite an independent study showing that Australia will suffer economic losses from such an agreement, and at the very time when war may also begin. AFTINET has produced an updated leaflet, letter to the Minister and letter to the media - see the web site's front page for links.

The leaflet outlines the US demands about the Pharmaceutical Benefits Scheme, private investment in essential services like health, education and water, abolition of Australian content rules in film and TV, labelling of genetically modified food and abolition of the Foreign Investment Review Board and minimum Australian investment requirements in Telstra, media, and airlines.

If you can please distribute the leaflet to your networks and send a letter to the Minister.

AFTINET’s view that essential services and social policies should not be determined by the FTA trade negotiations received good coverage in the Sydney Morning Herald on March 18. Doug Cameron from the AMWU was quoted in the Australian on March 18. There have also been numerous radio interviews and a TV interview on the CNN Business channel, CNBC. AFP also ran a story on 17 March.

FINAL REMINDER RE SENATE INQUIRY SUBMISSIONS DUE FRIDAY 21 MARCH

As advised in earlier bulletins, the closing date for submissions to the Senate inquiry into GATS and the USFTA is 21 March. AFTINET’s submission will be based on our recent submissions to DFAT on the USFTA and GATS, available from the AFTINET website. The terms of reference are in Bulletin 54 on the AFTINET website. If you need an extension, you can contact the Committee by the closing date.

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2. Social policy fears over trade deal

A free trade agreement with the United States might mean more expensive prescriptions, more American TV and Telstra passing into foreign ownership, community groups warned yesterday. The first stage of negotiations for a free trade deal between Australia and the US will be formally launched in Canberra today, but the Australian Fair Trade and Investment Network, a coalition of 62 community groups, said the negotiators would be canvassing many local social policy issues that should not be on the table.

Both governments are playing their bargaining cards close to their chests, but the US is expected to target the Pharmaceutical Benefits Scheme, which enables the Government to buy medicines in bulk to be sold at a discount. Big US drug firms believe they are disadvantaged by this intervention. The US has also indicated it will assail local television content rules and stringent labelling of genetically modified foods. The US Trade Commissioner, Robert Zoellick, has told Congress he would challenge Australia's foreign investment restrictions. If successful, a trade deal might override the Government's local ownership policies on Telstra, Qantas, media companies and the big banks.

The Government has insisted any deal will not impair its capacity to deliver fundamental policies. But the network's convener, Dr Patricia Ranald, said this assurance was too vague. "Australia's main target is agriculture, but it's very unlikely we are going to achieve very much without making substantial concessions on their wish list. And their wish list is about our social policies.''

The Australian Consumers' Association voiced concerns yesterday that the US would push to eliminate Australia's labelling requirements on genetically modified foods, and that the Federal Government was sympathetic to the US position.

Food labels must disclose genetically modified content of more than 1 per cent in Australia, but the association's head, Louise Sylvan, said US negotiators wanted to stop these laws from being used as a precedent for other countries. Ms Sylvan also said US pharmaceutical companies ``detest'' Australia's PBS. "The scheme is being emulated all over the world and [pharmaceutical companies] are terrified of it. They want to put a stop to this and have said they will use the [free trade agreement] to try.''

The Opposition accused the Government yesterday of using the free trade agreement to push policies already rejected by the Senate "through the back door''. Labor's trade spokesman, Craig Emerson, said the Government had been thwarted in its efforts to privatise Telstra, increase the cost of drugs and remove restrictions on media ownership, but would now pursue those objectives under the cover of a trade deal.

The Prime Minister, John Howard, rejected claims by Mr Emerson that the Government was endangering Australian interests by entangling trade policy with the US security alliance. "We are not taking the stance we are on Iraq in order to win a trade deal; I want to make that very clear,'' he said. But previous statements by the US and Australian governments appear to link the trade deal to security issues.

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3. Successful GATS Day of Action

Previous bulletins discussed the leaked European Union requests, which confirmed that the EU is asking Australia to include water and postal services as traded commodities and open them to privatisation in the GATS negotiations. Australia has also received similar requests about health and education services. AFTINET, the Australian Services Union, Oxfam, AID/WATCH and other community groups held a symbolic protest outside Sydney Water on March 11 to show community opposition to the inclusion of essential public services in trade negotiations. We called on the government to make public all requests and their responses and to delay the negotiations to enable public and parliamentary debate. AFTINET and the ASU received media coverage about the issue ranging from the Australian Financial Review on February 27 to the Daily Telegraph and commercial radio on March 11 and 12.

Thanks to all those AFTINET members and supporters who assisted in the preparations and attended the event.

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4. AFTINET meetings with DFAT

We have had several meetings with DFAT recently on both the GATS negotiations and the USFTA negotiations. The first set of meetings came about after we made an appointment to meet with DFAT in Canberra. Representatives of AFTINET’s Working Group had three meetings with DFAT in Canberra on 14 February 2003. We first met with the DFAT staff working on the Services negotiations, then with DFAT staff working on the other non-GATS WTO negotiations. We then met with the negotiators on the USFTA.

We had made recent submissions to DFAT on both GATS and USFTA negotiations, and we reinforced the key points from these submissions. In the GATS meeting we raised concerns regarding the consultation processes in these negotiations, including the inadequacy of the information released to the public. We also raised substantive issues about the negotiations, particularly the threats to public services and to governments’ capacity to regulate. We also sought specific information on the requests made to and by Australia, the government’s intended responses, and the government’s position on a range of matters being negotiated in the WTO.

In the USFTA meeting we emphasised our concerns over the US agenda of targeting social policies and that the Minister had refused to rule out any topics for discussion. We raised concerns over the rights that such an agreement would be likely to give to US corporations to influence Australian policy-making and regulatory capacity in a range of areas. We also stressed the importance of broad consultation with a range of civil society groups.

AFTINET had a further meeting with DFAT on 13 March in Sydney. This was a meeting called at short notice by DFAT regarding the GATS negotiations, and was presented as a consultation about the GATS offers, due to be submitted by March 31. The meeting was not advertised, and was only open to invitees of DFAT. In this regard it was far from satisfactory. We understand that similar meetings were held in Brisbane, Melbourne and Perth, but not in other cities. At the Sydney meeting we again raised our concerns regarding the Australian government’s approach to these negotiations.

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5. New Report Shows Negative Impacts, Threats Of Water Privatisation

A new report released on the eve of the Third World Water Forum shows that water privatization has had negative impacts on communities in many countries and threatens to affect an increasing number of people in 2003, the United Nations International Year of Water, and beyond.

The report, ‘Water Justice for All’ was released just prior to the March 16-23 World Water Forum in Kyoto, Japan and World Water Day (March 22). It reports "global and local resistance to the control and commodification of water" through 14 case studies and was published by Friends of the Earth International, the world's largest grassroots environmental network.

Available at www.foei.org in English, French, Spanish, and Japanese.

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6. WTO fears Bush go-it-alone role

Extracted from Elizabeth Becker/NYT The New York Times Saturday, March 15, 2003

U.S. policy could threaten international trade, aides warn

GENEVA In a break from years of unwavering public faith in the United States, top officials at the World Trade Organization are worried that the Bush administration's go-it-alone policy is threatening international trade. In the normally closed, clubby world of the WTO, envoys and officials said they feared that American moves within the organization and toward a war in Iraq would weaken respect for international rules and lead to serious practical consequence for the world economy and business.

In the past months the United States has compiled one of the worst records for violating trade rules and has single-handedly blocked an agreement to provide medicines for the world's poorest nations, a rare accomplishment in this institution that never openly votes on agreements but painstakingly builds a consensus behind closed doors.

Supachai Panitchpakdi, director-general of the WTO who is required to strike a neutral pose as head of the institution, said an upcoming war could have a devastating practical impact as the world is grappling with a slowdown in trade, the rise of oil prices and the rising cost of transportation and insurance. "I can feel the sense of trepidation," Supachai said in an interview. "Whatever happens, if the U.S. will maintain the way we use multilateral solutions, it will be highly appreciated."

That delicate expression of concern about the effect of waging war without explicit approval of the United Nations was repeated by some of America's strongest allies. They said they were worried that all international institutions would suffer a loss of credibility if the one superpower appeared to be choosing which rules to obey and which to ignore. "Normally you can't go to war without the cover of the UN, but Americans are doing quite a few things alone - even here," said Carlo Trojan, permanent representative of the European Union at the WTO. The most glaring example here of going-it-alone was the United States' last minute refusal to sign off on an agreement that would help poor nations buy generic medicines through exemptions from trade rules. Developing nations had pinned their hopes on this agreement to fight HIV/AIDS, tuberculosis, malaria and other diseases that are ravaging their countries and destroying their plans to climb out of poverty. But the United States, with the strong approval of the American pharmaceutical industry, exercised its veto, which every nation possesses, and destroyed the deal. That upended the timetable for this round of trade negotiations that is dedicated to solving the problems of a developing nations, a cause identified with Supachai.

Diplomats said they found it striking that Europe was willing to stand up to its pharmaceutical industries and support the agreement while the United States was not. Sergio Marchi, permanent representative of Canada to the WTO, said that U.S. behavior not only put millions of lives at risk but threatened the organization itself. "No one can criticize the fact that all politics are local. But you can't operate 100 percent on local politics if you're part of a multinational organization," he said. "Otherwise one day it's your politics, next year it's mine and then there is no more international organization."

For its part, administration officials said they, too, want an agreement that helps provide medicines. But they consider the current agreement too open-ended and say it could lead to developing nations buying generic versions of drugs under U.S. patents to treat diseases such as asthma, obesity and impotence. Linnet Deily, U.S. permanent representative at the WTO, said that developing nations understood the United States wanted to help those suffering from the worst epidemics, especially the HIV/AIDS pandemic. "The president's pledge of $15 billion in the State of the Union was extremely meaningful to delegates here," she said. She also disputed the notion that the mood toward the United States had changed at the WTO from wholesale support following the Sept. 11 attacks to open questioning of American exceptionalism and motives. "As far as I'm concerned that energy is more intensely felt today than it was a year and a half ago," she said.

As a pillar of the trading establishment - indeed the world's largest trading power - the United States is expected to lead the movement for more liberal trading rules. But since last year, after President George W. Bush imposed steel tariffs and signed a farm bill that dramatically increased subsidies, officials here are wondering if the United States is rescripting its role. "The World Trade Organization is supposed to be about trade-offs - giving up something and getting something else in return," said Shefali Sharma, representative here of the Institute for Agriculture and Trade, a nonprofit organization based in Minneapolis. "Before the European Union was the biggest sinner but the United States is making Europe look good," she said.

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