Washington pressures Canberra on China deal
1. USFTA campaign: Implementing Legislation still stalled in the Senate
On August 2 the Labor Senators on the USFTA Senate Committee released a contradictory
report confirming that the USFTA could result in higher medicine prices, less Australian
content in the media, higher copyright cost, reductions in quarantine protection and
manufacturing job losses, yet recommended support for the implementing legislation. The
report also listed a number of legal and policy changes needed to "safeguard"
against harmful effects of the agreement. As we have said before, many of these may not be
legally effective, as any future legislation or policy that is not consistent with the
agreement may be challenged by the US government through the disputes process in the
agreement. The document also mentioned possible amendments to the enabling legislation.
These can be legally effective only if they are consistent with the agreement.
On August 3 a meeting of the ALP Parliamentary Caucus decided it would support the
USFTA implementing legislation only if the government agrees to amendments in two areas:
pharmaceutical patents and local content media rules (see statement below).
The amendments seek to prevent pharmaceutical companies from delaying production of
generic drugs by vexatious claims for new patents on the same drugs and to enshrine in
legislation current local content requirements for Australian audio visual media. However,
they do not address the many other areas of concern.
The government has said it will consider an amendment on media content but has rejected
outright the amendment on medicines. If the ALP persists with this amendment, it will be
the last chance to defeat the legislation.
If the Government rejects the amendments, the ALP will have to decide whether to vote
against the Government’s legislation or to let it pass. It is critical that we keep
the pressure on the ALP, so that if this situation arises, they will vote against the
legislation.
Therefore, despite the limitations of the amendments, AFTINET is encouraging people to
contact Mark Latham expressing disappointment at the ALP's support for the USFTA but
urging him to stand firm on the amendments.
The patents amendment has put the issue of the impact of the USFTA on the cost of
medicines at the centre of the political agenda, and shown the public opposition to any
moves that will raise these costs.
At the time of writing, the amendments were still being drafted, and it is not clear
whether the government will continue to oppose them or will attempt some compromise on the
detail.
Update on the campaign
Thanks to a huge effort by AFTINET members in the past fortnight the ALP has really
felt the strength of community feeling about the USFTA. Recent events include:
- The joint statement organised by AFTINET from national community bodies including the
ACTU, ACOSS, churches , environment, cultural and software groups calling on the Senate to
block the legislation.
- We delivered nearly 1500 postcards from people all around Australia to Mark
Latham’s office, asking him not to implement the legislation.
- The excellent Four Corners program of August 2 on the PBS, medicines and drug companies,
featuring health experts and to which AFTINET contributed background material.
- This coincided with a rally outside his electorate office by a range of community
groups, organised by the Combined Pensioners and Superannuants Association.
- There has been activity in every state and territory protesting against the agreement
and calling on the ALP to take a stand against it. This includes rallies, fairs,
billboards, protests, letter-writing stalls, as well as direct lobbying of ALP
politicians.
- There have been huge numbers of letters to newspapers querying the USFTA, and calling on
the ALP to act.
- ALP politicians have received massive numbers of emails, letters, phone calls and faxes
on this issue.
If successful at the next election, Labor will introduce a
package of further measures responding to concerns expressed about the FTA. On balance, we
believe this approach maximises Australia's national interest: reaping the economic
benefits but safeguarding fundamental social policies. This has not been a straightforward
or easy decision. Far from it. Judging the evidence in complex areas of public policy
takes time and consideration.
We have made a decision in Australia's best interests and also fulfilled our
obligations as a responsible Opposition: scrutinising legislation and improving outcomes
for this country.
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3. WTO deal drops "new issues, " makes some progress on
agricultural subsidies but still neglects many needs of developing countries
The framework document for WTO negotiations agreed by the WTO General Council in haste
last weekend was cobbled together by key players, lacks detail in many areas and does not
appear to address a number of the issues raised by developing countries to redress the
inequalities of the global trading system. The framework is an attempt to salvage the
current round of WTO negotiations that collapsed in Cancun last year when developing
countries refused to agree to negotiations on investment, competition policy and
government procurement and demanded reductions in unfair agricultural subsidies in
industrialised countries like the US and the EU.
Developing countries have also criticised domination of the WTO process by the most
powerful players and called for a more open and inclusive process. But this occurred again
last week in Geneva with the key decisions on the document made by five governments, USA,
EU, Brazil, Australia and India.
The document sets a timetable which suits the US election cycle. Further negotiations
will not take place until the end of this year and the Hong Kong Ministerial Meeting to
finalise negotiations has been postponed until December 2005.
On the positive side, the document confirms that there will be no further negotiations
in this round on the "new issues" of investment, competition policy and
government procurement. This is a victory for the campaign against WTO agreements on these
issues waged by AFTINET and other community organisations around the world, and by many
developing country governments.
On trade in services (GATS) there is a commitment to increase the number of countries
making first round offers for further liberalisation of trade in services by the end of
September. Most developing countries have been reluctant to make such offers, so this puts
pressure on them to do so. There is also a timetable for second round offers next year.
There is a commitment to proceed with negotiations on restrictions on government
regulation of services, and issues like definition of subsidies. Both of these
negotiations have the potential to reduce the right of governments to regulate services
and to affect the provision and funding of public services. AFITNET will continue to argue
against the expansion of the GATS agreement because of its potentially harmful impacts in
Australia and in developing countries.
On the key issue of agriculture, there is a commitment to phase out agricultural export
subsidies in the EU and the US, which addresses some of the demands of developing
countries. But few concrete commitments have been made on addressing their special
development needs in areas like food security and industrial development. Many of these
areas remain to be thrashed out in the negotiations.
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4. Washington pressures Canberra on China deal
The Sydney Morning Herald, John Garnaut, August 3 2004
The Bush Administration is effectively putting pressure on Australia to abandon a
proposed trade deal with its fastest growing market by urging Australia not to recognise
China as a market economy.
A Government source confirmed yesterday that the US Trade Representative, Bob Zoellick,
has told the Trade Minister, Mark Vaile, on at last two occasions recently that Australia
should not recognise China as a market economy.
Such a move would be crucial as China has made it clear that recognition of its market
economy status is a prerequisite for Australia beginning negotiations on a trade deal.
The pressure coincides with the Business Council of Australia, which has been the most
vociferous supporter of Australia's free trade with the US, significantly cooling its
position on the potential for a similar deal with China.
Hugh Morgan, the council's president, heavily qualified his support after strongly
backing it previously. "Australia needs to take into account that China, although
emerging into a market economy, has yet a number of aspects of its internal administration
that might make it difficult to fully engage in an FTA," he said.
However, Mr Morgan said a decision on whether to back the deal should be made after the
Federal Government's scoping study into the agreement had taken its course.
The Government source said that Mr Zoellick and Mr Vaile had discussed China's market
economy issue on more than one occasion, with Mr Zoellick making it clear that Australia
should not set a precedent that other countries might follow. "The US has been very
keen for China not to pick countries off one by one on this, and there should be a unified
approach," the source said. "If they're going to get market economy status they
have to earn it."
A spokesman for Mr Vaile initially said the US had "absolutely not" exerted
such pressure.
But he later said: "We couldn't categorically deny that no one had discussed the
issue ... You would assume it must have happened at some point somewhere."
