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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

Photo: Jackaranga / Wikipedia / Public domain

Vaile briefs officials, defends monopoly
Trade Minister Mark Vaile has briefed senior Bush Administration officials on the Cole inquiry, will today brief members of Congress, and is defending Australia’s monopoly wheat sales system from the attacks of US lobby groups.
US, Australia won’t reopen trade talks
The United States said Tuesday it would not re-open a completed bilateral trade agreement with the Australian government to expand access to U.S. sugar markets, but would work to expand trade and investment ties between the two nations.
No change to US trade deal
Australia and the United States have agreed to look at but not act on changes to the Free Trade Agreement (FTA) between the two nations at a meeting in Washington.
Australia, US review free trade
AUSTRALIA and the United States have agreed to look but not act on changes to the free trade agreement between the two nations at a meeting in Washington.
Vaile to feel heat over wheat deals
TRADE Minister Mark Vaile is expected to face questions about the Cole inquiry and the future of AWB "single desk" for wheat exports from members of Congress and Government officials during a visit to Washington.
No change likely on sugar in FTA talks
Australia will push the United States to open its protected sugar market at the first review of the free trade agreement (FTA) between the trans-Pacific economic partners.
Free trade agreement - time to criticise big brother
What message does it send to the world when we unquestioningly enter into an agreement with a country who seeks to change the rules of the international game in order to win?
Too early to tell on FTAs
Waiting, waiting. It will take time to realise the benefits of our free trade deals with Thailand and the US.
Urgent call to amend FTA
THE Bracks Government yesterday called on the Federal Government to negotiate "urgent amendments" to the Free Trade Agreement with the United States, claiming Victorian manufacturers had become victims of artificial trade barriers.
Time to raise the flag
The Free Trade Agreement with the United States, we were told last year, was a political and bureaucratic triumph, with Trade Minister Mark Vaile and his Canberra mandarins being fearless in their negotiations with our star spangled cousins.