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Vaile defends trade deals

Herald-Sun, Australia

Vaile defends trade deals

By Belinda Tasker

18 January 2005

TRADE Minister Mark Vaile today defended Australia’s free trade deals with foreign countries after a new World Trade Organisation (WTO) report said such agreements could be discriminatory.

Australia’s free trade agreements (FTA) with the United States and Thailand came into force earlier this month and the Federal Government is considering pursuing another with China.

But the WTO report, released overnight, said it was deeply concerned by the "spaghetti bowl" of bilateral agreements springing up across the globe.

"It is unconvinced by the economic case for them and especially concerned that preferential treatment is becoming merely a reward for governments pursuing non-trade related objectives," the WTO report said.

The report said the only way to end the discriminatory preferences in the trade agreements was to reduce most favoured nation tariffs and non-tariff measures in multilateral trade negotiations.

"The need for success in the Doha Round (of world trade talks) is manifest from this perspective," it said.

"A commitment by developed members of the WTO to establish a date by which all their tariffs will move to zero should now be considered seriously."

But Mr Vaile hit back at the criticism, saying Australia’s FTA’s were in the national interest and would deliver benefits to all Australians.

"The new opportunities that will flow to Australia as a result of the bilateral free trade agreements with the United States and Thailand, which were WTO consistent, are enormous," he said in a statement.

However, he agreed with the report’s call for FTAs to support the multilateral trading system and for the WTO to develop more effective disciplines on such agreements.

"While not everyone, including Australia, will necessarily agree with all the recommendations of the report, it is an important sign of how seriously the WTO takes its responsibility to respond to change and continue to work for the benefit of all members - developed and developing countries alike," he said.

Opposition trade spokesman Simon Crean said the WTO report validated Labor’s concerns about Australia’s FTAs.

"Consistent with this report, Labor believes FTAs should only be pursued if they genuinely advance multilateral trade liberalisation," he said.

"This was not the case with the Australia-US FTA."

Mr Crean said Australia’s priority should be to help the liberalisation of the world market place at the WTO Doha Round of trade talks.

The Doha Round of talks is expected to conclude before the end of the year.

Continuing rifts between developed and developing nations on key issues and resistance to demands for cuts in agricultural subsidies prevented them wrapping up as planned last December.