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ASEAN talks hit a trade barrier

The Age

ASEAN talks hit a trade barrier

By Tim Colebatch, Economics Editor


October 22, 2005

WITH the Doha Round trade talks in crisis, negotiations for a free trade agreement with the Association of South-East Asian Nations are also floundering, with the two sides yet to agree on what to negotiate about.

The free trade talks were launched in Melbourne eight months ago, and were to be completed in two years.

But in Canberra next week, negotiators will start a fifth round of talks deadlocked over whether to negotiate on intellectual property, government procurement and competition policy - or stick to goods, services and investment.

A senior official said Australia and New Zealand wanted a comprehensive free trade agreement, but some ASEAN nations have no competition policy, and reject any negotiations on intellectual property and government procurement.

"Some of these countries have very little experience in negotiating FTAs," he said. They want talks on economic co-operation, but "we don’t need an FTA to deliver economic co-operation".

Meanwhile, the stalemate in the Doha Round over farm trade reform worsened, with a searing attack on European Union Trade Commissioner Peter Mandelson by French Finance Minister and presidential aspirant Nicolas Sarkozy.

Mr Sarkozy, the closest thing France has to a free-market reformer, accused Mr Mandelson of having already given away too much in tariff and subsidy cuts, "putting in danger the European interests of which he is the guardian".

The French backlash makes it harder for the EU’s trade chief to offer a reform blueprint big enough to satisfy the US, Australia and developing countries.

At the same time, the Federal Government has raised tariffs on imports of canned tuna from Thailand to protect Australian fishermen. Agriculture Minister Peter McGauran said the tariff would rise from 2.5 to 5 per cent as a safeguard action after Thai imports exceeded limits set by the FTA between the two countries.

It is the first time since the 1980s that Australia has taken a safeguard action. In 1999, the Government rejected a Productivity Commission report proposing a 10 per cent tariff on frozen Canadian pork after an import surge hurt Australian producers.

Freehills trade law partner Daniel Moulis warned that the US could also use snapbacks against Australian exporters.

"AUSFTA (the FTA with the US) has snapback provisions for a number of products, including price triggers on horticultural products and price and quantity triggers on beef," he said.

- Export prices jumped 4.7 per cent in the September quarter to a new record, the Bureau of Statistics said. But the rise was concentrated in coal and ores, with coal export prices jumping 135 per cent in just 18 months, while prices for manufactured exports have stayed flat.

Import prices fell 0.1 per cent in the quarter.

 source: The Age