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August 2004

USFTA legislation passed: What Next?


The government agreed on August 13 2004 to the ALP amendments to the USFTA implementing legislation and it passed through the Senate. However Prime Minister Howard has signalled that the US government might object to the amendment and the US Trade Representative has said that the US government reserves the right to examine both the amendment and the legislation to ensure that they are consistent with the text of the agreement . If the US decides that the legislation is consistent with the agreement, the final confirmation of the agreement should occur in October, and the agreement will come into force from January 2005.

The Prime Minister's comments confirm that the USFTA gives the US the right to object to legislation that does not conform to the agreement on medicines policy and on other policy areas that are included in the agreement. This is a reduction in our sovereignty and democratic rights to determine our own policies.

Now that the legislation has passed we need to assess the achievements of our campaign, and think about the next steps.

Campaign Achievements

The AFTINET campaign started nearly two years ago, as soon as the negotiations were announced in November 2002. It has included 90 community groups and many individuals. Together our achievements include:

  • Immediate detailed submissions to the government outlining the dangers of US negotiating targets, including the PBS, Australian media content, regulation of investment and services, quarantine and other issues
  • Distribution of over 80,000 hard copies of two publications and many more through our web site which receives 40,000 hits per month
  • Talks to over 100 city and country community and union meetings, ranging from national conferences to local groups, and links to experts in health and media groups
  • Articles in many community and union publications
  • Public meetings and rallies in most capital cities and a number of regional areas
  • Regular local, state and national print, radio and TV media coverage, including opinion pieces and letters to the editor. Opposition to the USFTA spread beyond our networks and came from health experts, film and TV stars, economists and journalists and was greater in the media than in any previous trade debate
  • Intensive training on the USFTA provided to 40 people from a range of unions and community organisations, and staffers from all opposition parties
  • Lobbying of MPs through letters , Avant Card postcards and personal meetings
  • Adoption by all opposition parties of critical policies on the USFTA, support for the Senate Inquiry and pledges to oppose the implementing legislation and thus defeat the agreement if the USFTA was not in the national interest

ALP divided, then supported the USFTA

While the Greens and Democrats kept this pledge, the ALP was divided on factional lines. Arrayed against our campaign were the US government, major business lobby groups and the Murdoch-owned News Limited media, which campaigned openly for the agreement.

The ALP Left opposed the USFTA but Mark Latham was convinced by the majority Right faction, especially key pro-US front benchers, to support the USFTA. The ALP Senators' report on the Inquiry admitted that the USFTA could result in higher medicine prices, less Australian content in new media, higher copyright costs, reductions in quarantine protection and manufacturing job losses, yet recommended support for the legislation.

Mark Latham's amendments to penalise abuse of patents by drug companies and to protect current media content rules were in part a response to the issues we raised. They were also a clever political move against the government and exposed those issues to further public debate. But they only address one aspect of each of these issues. They will not protect Australian content in new forms of media, nor will they comprehensively prevent delays in the production of generic drugs, which would require a range of other laws and policies.

Monitoring the USFTA

We now have a USFTA that

  • gives US drug companies rights to seek reviews of decisions by the Pharmaceutical Benefits Advisory Committee and despite the ALP amendments,
  • gives priority to protecting the intellectual property rights of drug companies over the principle of access to affordable medicines.
  • adopts US copyright law, meaning higher costs for libraries and schools and negative effects for small IT software firms, including the Australian local Open Source software industry
  • sets up joint committees on quarantine, opening us to US pressure to reduce standards. The American Farm Bureau Federation expects many gains for US exporters because of these committees
  • gives greater access for the US to Australian manufacturing markets than Australian access to US markets. This could mean significant loss of Australian jobs in regional areas of high unemployment
  • "binds" or freezes state and local government regulation of essential services at existing levels, unless they are listed as exceptions. This limits the ability of future governments to regulate in many areas. Water, electricity, public transport and aged care have not been listed as exceptions.
  • limits the power of the Foreign Investment Review Board to assess whether US investments are in the national interest by increasing the threshold from $50 to $800 million for all but a few exempt sectors,
  • has not been subject to an environmental impact assessment, leaving many questions about the environmental consequences of the FTA unanswered, and
  • has a disputes process which allows the US government to challenge many Australian laws and policies before a trade tribunal based on trade law without considering impacts on health, culture or the public interest.

Where to from here?

AFTINET will monitor and publicise the impacts of the agreement in these areas.

The ALP has said that if it wins government, it will take measures to protect some of these areas. But some of these measures may not be legally effective, since the US government can challenge laws or policies that are not consistent with the agreement. The Senate Inquiry also supported a more open and democratic process for dealing with future trade agreements. AFTINET will continue to pursue these issues.

Once the USFTA is implemented, the only remaining remedy is for the Australian government to use the termination clause to give 6 months notice to end the agreement. This is rarely done, and would not be easy as the agreement would be strongly supported by those sections of business that will achieve some gains from it.

But if the US government does use the USFTA dispute process to challenge an Australian law or policy, this could form the basis for a campaign to end the agreement.

As well as pursuing USFTA issues, AFTINET will continue to campaign on the WTO agreements, especially GATS, and on other proposed bilateral agreements.

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