One of the things that slipped through to the keeper back in the dark days of the Howard Government was the free trade agreement with America. There was little information issued from the government, some modest coverage of it in the media, but little to no details of the agreement. All we kept hearing was that "this is a good thing for Australia". A quick Google Search would take you to the US State department web site where a summary of the agreement could be seen.
In short, it was the product of a close personal alliance between then-PM John Howard and George W. Bush. It reads as though America is protecting their interests and their export dollars while Australia, as usual, lays down on its back while the yanks walk all over the top of us. Just like our airwaves being saturated with American content, the free trade agreement meant that we had to open our borders significantly to allow more US-produced materials while they would increase their imports from Australia by less than 1% of their total import quota.
It turns out that within 12 months of this agreement starting in 2005, the total imports from the US rose to $3.7 billion every 3 months. This makes for a great win for America, but bad for Australia, considering our exchange rate against the greenback at the time was so weak.
In the initial negotiations, the US wanted us to significantly relax our Pharmaceutical Benefits Scheme (PBS), which makes our prescriptions so affordable, and also to relax our Australian Content quotas on Radio and TV. This has also happened, as it turns out (more on that later, as this is a major gripe with me).
The upshot of all this means that we were sold on the idea that we would be able to have our exports compete on a more level playing field in the US marketplace, but considering their primary industries are already heavily government subsidised, Australian product would look exhorbitantly expensive in comparison to locally made US products in the same instance. Take this quote from Inside.org.au:
"...the United States maintained substantial barriers to Australian imports while gaining not only the removal of nearly all traditional trade barriers, but also influence over a wide range of Australian domestic policy institutions."
The benefits of the agreement for Australia? In short, none. It doesn't, it didn't, and it won't benefit us in the future. The US can just come in and ride roughshod over us, and we can't do anything in return.
The discussion on the repealing of such an agreement by Julia Gillard is one of the smartest things she's said in recent times. Let's hope it goes ahead.
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