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US-Australia

The US-Australia Free Trade Agreement (or AUSFTA) was signed on 18 May 2004 and came into effect on 1 January 2005. It’s a comprehensive agreement, with chapters on: Market access for goods, agriculture, pharmaceuticals, cross-border services, financial services, electronic commerce, investment, intellectual property rights, government procurement, competition policy, labour, environment and dispute settlement.

Throughout the negotiations, the contents of the agreement were problematic for different sectors on both sides of the Pacific. US farmers managed to keep sugar out of the deal, but would face new competition from Australian dairy imports. Social opposition to the agreement ran high in Australia, the major concern being access to affordable medicine. The FTA commits Australia to provide stronger patent monopolies to US drug companies, directly compromising Australia’s Pharmaceuticals Benefits Scheme (PBS).

The FTA became a key electoral issue in Australia in late 2004. However, Prime Minister Howard was re-elected and came to a final accord with the Bush administration on the drugs chapter by the end of the year, thereby assuring the agreement’s entry into force at the start of 2005.

One year into the FTA, debate broke out in Australia over the impacts. In the first year, US exports to Australia had shot up while Australia’s exports to the US had shot down. Further, US drug companies were not happy with the limited safeguards left to protect Australia’s PBS and started moving to have them scrapped.

In 2007, Australia registered a $13.6 billion trade deficit with the US, its largest ever with any trading partner. The National Institute of Economic and Industry Research estimates that the US-Australia FTA could cost the Australian economy up to $50 billion and 200,000 jobs.

last update: May 2012


End Days to Cheap Drugs With U.S. Trade Deal
Australia’s ratification of a free trade agreement with the United States has sparked warnings that it represents a major win for the U.S. drug industry in blocking generic manufacturers and undermining the country’s internationally acclaimed system for lowering pharmaceutical prices.
Trade deal template for NZ
Australian Labor leader Mark Latham’s onslaught on the US free-trade deal has profound implications for New Zealand.
USTR statement on Australia’s amendments
We understand that the FTA implementing legislation and amendments pose important issues in Australia, just as they did in the United States.
Senate passes FTA deal amid US warning
The Coalition and Labor combined to pass the legislation after two weeks of debate in Senate, but the deal could still come unstuck if the US decides Australia’s supporting legislation including Labor’s amendments are not consistent with the agreement.
A heavy-duty vehicle for colonisation
John Maynard Keynes once reflected that his upbringing presumed free trade to be part of the moral law. More, he regarded departures from it as being ’’an imbecility and an outrage’’.
Union vows Labor will pay for trade deal
Labor’s support for the American free trade agreement will cost the party about $100,000 in union donations - a blow on the eve of the federal election campaign.
Software groups warn of FTA dangers
The US-Australia Free Trade Agreement poses a grave threat to the entire Australian software development industry due to the legal framework on intellectual property which is required upon adoption of the pact, the Open Source Industry Association and Linux Australia have warned.
US-Australia FTA: Furniture makers fear they may take a big hit
The US free trade agreement is getting a mixed response from manufacturers, writes Ian Porter. The prospect of Australian manufacturing going toe to toe with the giant American industrial base might sound like an abject mismatch.
Free trade agreement not all good news
Australia’s free-trade agreement with the United States was on a rollercoaster to somewhere all this week and the most seasoned observers hadn’t a clue where the thing would end up.
Drug spat stalls Australia-US free trade deal
A long-awaited Australia-US free trade agreement (FTA) hit a new snag in Canberra, just hours after US President George W. Bush reaffirmed Washington’s commitment to a pact he called "a milestone in the history of our alliance".