logo logo

US free trade deal is no two-way street

The Age, Melbourne

US free trade deal is no two-way street

Ian Porter and Nabila Ahmed

19 September 2006


We all know Australia is one of the closest allies and best friends of the US, but I bet you didn’t know we are also one of the best customers for all things that come from the land of the free and home of the twin deficits.

While the US buys billions of dollars of goods from distasteful (in its eyes) regimes such as Communist China, Saudi Arabia and quasi-democracies such as Japan and Singapore, we Down Under are treated differently.

Oh, yes. Out of the 127 countries with which the US trades, 87 of them run trade surpluses with the world’s biggest economy. But not us.

Of the other 40 countries, Australia runs the fourth-largest trade deficit, $US5.24 billion in the seven months to July, according to the US Commerce Department. The only economies with larger trade deficits are Hong Kong, the United Arab Emirates and the Netherlands.

Of course, our poor export performance to the US may just have something to do with the comprehensive Free Trade Agreement we have signed. America’s starting point for the FTA negotiations was that it would not allow in anything from Australia that was world competitive. No wheat. A little sugar. No aluminium ships.

It makes it hard when all the things you are good at are banned outright.