Vaile to fight US on sugar

The Australian

Vaile to fight US on sugar

Patricia Karvelas and Steve Lewis

January 05, 2006

AUSTRALIA will urge the US to prise open its lucrative sugar markets as part of a fresh push to improve access for farmers under the free trade deal.

Investors may also be able to buy shares listed on US bourses through Sydney and Melbourne stockbrokers under efforts to broaden the access of financial services to the huge American market.

The Howard Government’s renewed attempt to secure a better deal from the free trade agreement came as Acting Prime Minister Mark Vaile defended lopsided results from the first year of the pact.

Imports from the US rose 5.7 per cent while merchandise exports fell 4.7 per cent, leading to fears Australia is getting the raw end of the deal.

Mr Vaile, Australia’s chief negotiator on the trade deal, called for patience and blamed the stronger dollar and increased competition from Asia for the disappointing results.

Under pressure from the farm sector, Mr Vaile said yesterday he would ask Washington to consider opening its sugar markets when he met US Trade Representative Rob Portman in March.

"There may be an opportunity in the future to include it and so we’ll continue to put that forward as an ambition of ours, to get sugar included in the bilateral agreement," he said.

Sugar was controversially excluded from the trade deal after Washington was heavily lobbied by US farm interests. But Australia will argue that the trade pact is a flexible framework and the US should agree to changes.

"These bilateral agreements like this have got to provide win-win opportunities - there’s got to be opportunities for both sides," Mr Vaile said.

"Sugar will be something that I’ll raise during those discussions."

National Farmers Federation president Peter Corish welcomed Mr Vaile’s decision to raise the matter.

"These agreements are designed to be dynamic and if there are changes that provide benefits, they should be explored," Mr Corish said. "(But) I think it would be very difficult to get movement on sugar."

In another twist to the trade debate, rebel Queensland Nationals senator Barnaby Joyce signalled he may block a move to scrap a drug-price safeguard in the FTA unless sugar farmers are given greater access to US markets.

Senator Joyce said he had seen no evidence supporting complaints by the Americans that an "evergreening" amendment, put forward by former Labor leader Mark Latham, was deterring investment in the pharmaceutical industry. The clause was designed to stop drug companies extending patents to fend off cheaper generic brands.

"If the Americans are saying they need to have their case heard about pharmaceuticals, then they would have to have our case about sugar heard," Senator Joyce said.

Nationals Senate leader Ron Boswell also tied his support for the pharmaceuticals amendment to sugar. "If other issues are to be considered, I would expect the sugar industry to put their hand up and I would support them," he said.

Australian Cane Farmers Association chairman Ross Walker said farmers would be angry if Canberra moved on pharmaceuticals but not sugar.

Aside from the sensitive agricultural issues, financial services will be another area of discussion at the Washington meetings. The Investment and Financial Services Association is lobbying for improved access for Australian fund managers to lucrative share-market offerings in theUS.

"Financial services and the broader services area is one area where we continue to improve the penetration and coverage of the agreement," Mr Vaile said as he downplayed concerns about the trade deal following the first-year review.

"During the last 12 months ... (we have) had a very high exchange rate on the Australian dollar, which has been attractive for imports and an impediment to exports. At the same time, there have been buoyant and robust economies operating in north Asia that have been very attractive for our exporters to go into ..., so you can’t just look at 12 months in isolation."

But Greens leader Bob Brown said the $1billion blowout in Australia’s trade deficit with the US showed the agreement was biased. "The big parties sold out on advancing Australia’s interests fairly," he said.

Trade consultant Alan Oxley was also sceptical about Australia’s chances of winning concessions from the US. "The prospect of getting the Americans to reopen the agreement and include sugar are extremely poor."

Additional reporting: Greg Roberts

source: The Australian