logo logo

No change to US trade deal

Australian Financial Review

No change to US trade deal

8 March 2006


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.

Trade Minister Mark Vaile and his US counterpart, Rob Portman, met for several hours on Tuesday as part of the first formal review of the Free Trade Agreement.

But despite high hopes on both sides, no concrete changes were agreed to. Instead, both countries said they would look at a range of proposals.

Mr Vaile told reporters via a phone hook-up that he sought an increase in the quota on Australian sugar into the US, and to have a 0.62¢ a pound tariff on Australian sugar dropped.

He also asked the US to look at dropping the 6.4 per cent tariff on so-called "retail ready" lamb.

On each request, Mr Portman said the US would take on board the Australian proposals.

"Obviously, the Americans were not able to concede that as far as the discussions today are concerned, but have undertaken to keep that under review," he said.

The US used the meeting to raise its own concerns, focusing on Australian law covering patent protection on pharmaceuticals and the use of generics.

Mr Portman also sought commitments that the Australian Competition and Consumer Commission would retain its independence and authority in relation to the telecommunications sector.

The US also raised issues surrounding bans on the importation of American stone fruit and apples into Australia. Both products are subject to import risk analysis studies by quarantine watchdog Biosecurity Australia.

Mr Vaile said Australia also raised issues surrounding the greater recognition of professional qualifications for engineers, accountants and lawyers in the US.

He said although there was no commitment from the US on the key issue of sugar, Mr Portman had said major trading partners - and those with FTAs - would be looked upon first if more sugar had to be imported.

The US raised questions about the operational separation within Telstra due to changes made by the government last year, Mr Vaile said.

"I indicated to the American side that we as a government are certainly focused on ensuring that that is done in the appropriate way," he said.

During the discussions, attention was paid to state trading enterprises and the focus on them in the current World Trade Organisation (WTO) negotiations.

Mr Vaile said Australia’s monopoly wheat export system was not trade distorting, and this was recognised by the US in the talks.

"We argue that the actual operation of monopoly powers in the Australian circumstance does not in any way circumvent us being able to apply those disciplines which we’ve agreed to do," he said.

"In our discussion, Mr Portman recognised that Australia, in so doing, would comply with commitments that we’re given in the WTO and in the context of the FTA."

Mr Vaile heads from the US later this week to London where a group of nations, including Australia, will discuss the current WTO round of talks.

Mr Portman said time was running out as the WTO tried to get a firm package together by April 30.

"At our discussions this weekend, we’re hoping we can resolve some of the current blockages that are keeping us from making progress.

"I’m hopeful we can break the logjam," he told reporters in the US.

"But as I’ve said before, this is really at this point a matter of political will."