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US trade deal failing some Aussie firms

Sydney Morning Herald

US trade deal failing some Aussie firms

April 19, 2006

Australia’s free trade agreement (FTA) with the United States is only benefiting businesses with well-established links, Australia’s peak industry group says.

The federal government said the agreement, which started last year, would reap billions of dollars for businesses as they broke into the American market.

But Australian industry Group chief Heather Ridout said while it was hard to judge the results of the agreement just over 12 months after it began, it had delivered mixed results.

"I think we are very enthusiastic about it," Ms Ridout told the National Press Club.

"That said, over the last 12 months our members that have operations and links into the American market tell us that they are doing better ... they are actually benefiting from the agreement.

"But those who are trying to break into the market haven’t found it any easier and areas like the government procurement market that we hoped would be more opened up is proving more problematic."

The US government procurement market is worth an estimated $360 billion.

Ms Ridout said the US FTA was a work in progress and a larger problem was the high Australian dollar, which needed to fall to between 65c and 70c to ease pressure on manufacturers.

She said any future free trade agreement with China needed to ensure Australian intellectual property rights were protected, investment conditions were clearly spelled out and worker qualifications were mutually recognised.

"There’s a whole lot of behind-the-board initiatives that we believe need to be front and centre of any agreement with China," she said.

"FTA or not FTA, China and Australia are going to have an engagement and for the manufacturing sector it’s tougher than for most sectors."

 source: Sydney Morning Herald