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28 September 2006
Contents:
- G20 and Cairns Group meetings fail to revive WTO negotiations
- AFTINET and Trade Ministry on the AUSFTA in the Australian Financial
Review
- Vaile to step down as Trade Minister
- Tonga defers WTO membership
- Japan next on Australia’s free trade agenda?
- STAND UP against global poverty on October 16, Sydney, Melbourne, Brisbane,
Canberra, Darwin
1. G20 and Cairns Group meetings fail to revive WTO negotiations
By Hugh Bennett
The G20 meeting of WTO developing country
governments concerned with agriculture met in Brazil in September, together with
representatives of the G33 and other developing countries, and also held discussions with
EU, US and Japanese trade representatives. However there was no breakthrough. The G20
statement regretted the suspension of WTO talks and repeated previous calls for
elimination of unfair US and EU export subsidies, and for special and differential
treatment for developing countries to protect their vulnerable agricultural sectors.
Two weeks later US and EU representatives
also attended the 20th anniversary meeting of the Cairns Group meeting of
agricultural exporters, hosted by Australia, and including both industrialised and
developing countries. As the EU and the US exchanged blame for the collapse of WTO
negotiations in July, Australia as host was having difficulty maintaining the peace among
within the Cairns group. As chair of the Cairns Group, Australia proposed a further $5
billion reduction in US payments to farmers and further cuts of 5% in EU offers on
agricultural tariffs, but did not address the specific concerns of developing countries.
Although the most established agricultural
lobby at the WTO table, the Cairns Group now shares the agricultural spotlight and many of
its members with the larger G20 and G33 groups of developing nations who have major
interests in protecting their vulnerable rural populations. While Australia emphasised the
importance of universal tariff cuts to win concessions from the US and EU, Indonesia and
the Philippines, leading members of the G33 as well as the Cairns Group, argued that
special measures were required to protect the welfare of hundreds of millions of
subsistence farmers in the developing world.
Hopes of reviving negotiations depend on
resolving the deadlock between the EU and US over the size of the concessions each is
prepared to offer. European Trade Commissioner Peter Mandelson, rejecting Australia’s
invitation to attend personally, effectively set the tone for the talks by lambasting
Australia for its perceived American bias and ‘Europe-bashing’. With such an
antagonistic mood set, both the EU and US dedicated much of their effort at Cairns to
obstinately maintaining their own positions.
Although it has welcomed moves to eliminate
all export subsidies by 2013 Australia has found itself embroiled in a new conflict over
the precise meaning of the term. Attending the discussions as an observer, WTO Director
General Pascal Lamy identified the single desk marketing systems like the Australian Wheat
Board as sources of unfair benefit in the export market, essentially export subsidies by
another name. Trade Minister Mark Vaile disputed this.
Quite apart from the principle of single
desk marketing, the AWB also faces charges of corruption in Iraq currently being
investigated by the Cole Inquiry.
The Cairns Group statement called for trade
talks to resume, for meaningful concessions from the US and the EU, and mentioned
developing country concerns without proposing specific solutions to them. The WTO crisis
will not be resolved without addressing these needs. AFTINET is calling for governments to
take the opportunity of the suspension of talks to rethink the structure and the content
of multilateral trade arrangements, to deliver genuine gains for developing countries,
support labour rights and environmental standards, and enable all governments to retain
their central role in fostering local development and regulating essential services.
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2. AFTINET and Trade
Ministry on the AUSFTA in the Australian Financial Review
Following the publication Dr Patricia
Ranald’s call for the abandonment of Australia-China free trade talks in the
Australian Financial Review on September13 (see bulletin 130), the following response from
Parliamentary Secretary De-Anne Kelly and reply by Dr Ranald were also published. The
government seems ultra-sensitive about any criticism of the USFTA, to the point of
ignoring the China FTA issues and attempting to smear critics!
Letter to the Australian Financial Review
19/9/06 from De-Anne Kelly, Parliamentary Secretary, Minister for Trade:
AUSTFTA delivers outcomes
Patricia Ranald of the Public Interest
Advocacy Centre argues the Australia-United States free-trade agreement (AUSFTA) is a
"face-saving deal" and the benefits of "free-trade agreements have been
exaggerated" as the basis of her call ("Abandon China free-trade talks",
Letters, September 13).
The truth is the AUSFTA is delivering real
commercial outcomes for Australian exporters.
In 2005-06 there was a 3.4 per cent
increase in merchandise exports to the US and a 3.6 per cent increase in services exports
in 2005. Last year, the Australian sugar quota was increased to 126,686 metric tonnes.
However, it is specific industries which
have benefited the most. Exports in 2005 of Australian produce to the United States have
increased: dairy is up 47 per cent; cheese 90 per cent; and lamb and mutton 19 per cent.
Services have also enjoyed a rise in exports: technical services have increased by 113 per
cent, transportation services by 25 per cent; personal, cultural and recreational services
by 21 per cent; communication exports 11 per cent; and computer and information services 5
per cent.
AUSFTA has delivered direct access to the
huge government procurement market of the US federal government and 31 American states.
Australian companies have already secured $95 million worth of government contracts in the
last financial year.
High-quality FTAs deliver real benefits but
they are complementary and not a substitute for the Doha World Trade round, which Trade
Minister Mark Vaile has pursued with great energy. FTAs deliver faster and deeper gains
for our exporters in key and emerging markets.
Vaile said the Australian government would
be irresponsible to stand by and ignore the huge opportunities presented by China's
economic transformation with hundreds of millions of people moving out of poverty in the
last two decades.
Your readers should be aware that the
Public Interest Advocacy Centre, of which Ranald is principal policy officer, is linked
with the Maritime Union of Australia, Australian Council of Trade Unions, Australian
Education Union and others.
Letter to Australian Financial Review
from Dr Patricia Ranald, 26/9/06:
Studies over-estimated benefits of free
trade agreements
Parliamentary Secretary De-Anne
Kelly’s reply to my letter of September 13 misses the point on several fronts. The
subject was the China FTA, and made only passing reference to the AUSFTA. In both cases,
the point stands that studies conducted before the negotiations assumed removal of all
trade barriers and ignored social impacts, and therefore overestimated the likely benefits
of the agreements.
While her letter argues that Australian
exports to the US have increased in some agricultural and services sectors, the figures
also show that they have fallen in some manufacturing sectors. She does not mention that
Australia’s total trade deficit with the US has increased, that is, the value of
total US exports to Australia has increased more than Australian exports to the US.
But these trade figures do not measure the
social impacts of the AUSFTA on Australia’s health and other social policies. For
example, the AUSFTA required a review to be conducted this year of Australia’s
national system of voluntary blood collection and processing, with a view to encouraging
US companies to tender for this service. Studies show that the US system of payment for
blood results in higher risks to the blood supply. All major health organisations have
argued that the health policy principles of safety, security and self-sufficiency in blood
products should prevail over trade considerations. Fortunately, state governments also
support these principles, and their agreement will be required to change the system when
the review reports next year.
The comments about the Public Interest
Advocacy Centre (PIAC) are simply inaccurate. PIAC is an independent, non-profit legal and
policy organisation that seeks to promote a just and democratic society by making
strategic interventions on public interest issues. It works co-operatively with other
organisations to promote public discussion about those issues.
On the public interest issue of the social
impact of trade agreements PIAC works closely with and hosts the Australian Fair Trade and
Investment Network Ltd (AFTINET), which is a separate company from PIAC. AFTINET has a
membership of 90 community organisations, the largest single grouping of which is church
organisations. It also includes unions, environment groups, social welfare, health and aid
groups. All of its members are concerned about the social impact of trade agreements and
want a fairer global trade system based on international standards for human rights and
the environment.
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3. Vaile to step down as
Trade Minister
As the Cairns Group meeting wound to a
close last week Mark Vaile officially announced his resignation as Trade Minister in
favour of the less hectic portfolio of transport, ostensibly to focus on leading the
National Party into next year’s election. He will be replaced by former Transport
Minister and deputy leader of his own party, Warren Truss.
With the suspension of WTO negotiations,
the fate of the Australian Wheat Board is likely to feature heavily in Truss’s new
portfolio as WTO director Pascal Lamy claims single desk marketing is a trade barrier and
the Cole Inquiry hands down its findings in late November.
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4. Tonga defers WTO
membership
Summary of Pacific Islands Report from
Pacific Islands Development Program/East-West Center and Center for Pacific Islands
Studies/University of Hawai‘i
NUKUALOFA, Tonga (Matangi Tonga, July
26) – Tonga has deferred its membership of the World Trade Organization until July
next year, the Tongan Prime Minister, Dr Feleti Sevele told the Tongan media yesterday,
July 25.
The delay he said did not mean that Tonga
was withdrawing its WTO membership application, but to give Tonga more time to improve its
tariff system. However, civil society groups in Tonga had also debated the claimed
benefits of the small island economy conceding to the demands of WTO membership,
reflecting wider skepticism in the Pacific Islands about the social impact of trade
agreements.
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5. Japan next on
Australia’s free trade agenda?
As free trade negotiations with China
remain at a standstill, Australian trade officials are engaged in talks with their
Japanese counterparts in Tokyo this week on a feasibility study for an Australia-Japan
free trade agreement. Trade Minister Mark Vaile has already hinted at the favourable
conclusions of the final report, due for publication in the coming weeks. However he
referred to certain areas of ‘sensitivity’ in the agricultural sector, the main
stumbling block in Australian agreements with China and the US also.
Japan’s imports of coal and iron has
made Japan Australia’s third largest trading partner. However Japanese agricultural
markets remain among the most heavily protected in the world, with tariffs as high as 400%
on sensitive products such as rice.
In its capacity as Chair of the Cairns
Group the Australian government has demanded that Japan reduce these tariffs. The
contemplation of a free trade agreement with Japan would seem to undermine credibility on
this issue.
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6. STAND
UP against global poverty on October 16, Sydney, Melbourne, Brisbane, Canberra, Darwin
STAND UP is a global effort to set an
official Guinness World Record for the greatest number of people ever to STAND UP against
Poverty and for the Millennium Development Goals, to Make Poverty History
and show world leaders that it is time to TAKE A STAND against poverty. You can stand up
at the following events, where there will be music and activities. You can also write to
the Treasurer asking him to put poverty reduction at the top of the agenda for
the G20 meeting of Finance Ministers in Melbourne in November. Note that this is a
meeting of Finance Ministers mainly from industrialized countries, which will discuss debt
issues, not the WTO G20 described above. For more information see www.makepovertyhistory.com.au
Sydney: Martin Place, Monday October
16, 1pm - 1.45pm
Brisbane: Queens Gardens, Monday
October 16, 4pm - 6pm
Melbourne: Federation Square, Monday
October 16, from 7am
Canberra: Parliament House, Monday
October 16, 12 noon
Darwin: Raintree Park, Monday
October 16, 12pm - 12.30pm
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