Sydney Morning Herald | 20 Sep, 2010
Free trade deals are not worth the effort, firms say
Businesses feel they are getting little benefit from free trade agreements negotiated by the federal government and think there are better ways to help companies competing abroad.
A survey into views on such agreements, taking responses from the likes of Rio Tinto, Toyota and BlueScope Steel, finds significant scepticism with the time and money the government has spent on negotiating trade deals with individual countries.
Over the past decade, as global trade talks have largely stalled, government attention has shifted to tying up deals with individual nations.
The government has, for instance, locked in trade deals with the United States, Thailand and other members of the Association of South-East Asian Nations, and is in advanced talks with South Korea. Negotiations on Japanese and Chinese agreements are struggling.
But the survey by the Australian Chamber of Commerce and Industry, commissioned for a government review into trade deals, suggests widespread ambivalence about whether the process is worth the effort.
Many businesses did not feel that they have benefited from free trade agreements and have gained little in access to markets.
Another criticism was that the process of arriving at free trade deals lacked transparency, the details were driven by government departments and many firms felt shut out of the process.
The surveyed businesses also said that they were given more help from direct trade facilitation measures, such as grant schemes for exporters, than complex trade deals that they struggled to understand.
’’It is clear from the results that the current FTA agenda needs significant reform,’’ the chamber’s chief executive, Peter Anderson, said.
In November, the government asked the Productivity Commission to inquire into the benefits of bilateral and regional trade deals. The chamber’s submission is just one of a number querying the benefits of free trade agreements in favour of a sharper focus on multilateral trade deals involving all countries.
In contrast, the submission by the Department of Foreign Affairs and Trade argues that while the government’s first interest is in multilateral trade deals, bilateral deals can be a good second-best when global talks break down.
The chamber’s manager of trade policy and international affairs, Nathan Backhouse, said trade had become bogged in a debate about whether bilateral or multilateral deals were best.
’’But this misses the key area of what governments can do to provide direct market access assistance,’’ Mr Backhouse said. ’’The area of behind-the-border issues in overseas markets now ranks as the major concern for business. And much can be done in a strategic way that could benefit and support business activities offshore.’’