[Ip-health] Australia - US FTA

[Kevin Outterson]

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May 19, 2004
Trade Deal Opens Australia to U.S. Manufactured Goods
By ELIZABETH BECKER

ASHINGTON, May 18 - The United States and Australia signed a free trade agr=
eement on Tuesday, and the Bush administration says it hopes Congress will =
pass the measure this summer.
But the prospects for Congressional approval are uncertain. The agreement c=
ould become a victim of the growing distractions of the war in Iraq and the=
 presidential election as well as a paralysis caused by disagreements betwe=
en powerful interest groups.
In the horse trading to reach the accord, the United States opened itself t=
o Australian agriculture exports, while Australia opened the door to Americ=
an manufacturing exports.
As a result, the American manufacturing and pharmaceutical industries stron=
gly support the accord, and American farmers are nearly unanimous in their =
opposition.
The Bush administration has yet to persuade a majority in Congress to suppo=
rt the agreement with Australia, which was one of the United States' earlie=
st allies in the war in Iraq.
The United States trade representative, Robert B. Zoellick, signed the agre=
ement and said afterward that the administration would put it before Congre=
ss soon.
"We're looking to try to get this agreement done this summer, if we can, ev=
en though it's a crowded calendar because of the election," he said.
The Australian minister for trade, Mark Vaile, signed the agreement in a ce=
remony at the gilded Andrew W. Mellon auditorium. In marked contrast, Presi=
dent Bush signed the trade agreement with Singapore last year in a glitteri=
ng White House ceremony, when his administration was less preoccupied with =
war and the election.
The issues in this accord have produced a strange alliance. Many Congressio=
nal Democrats who generally oppose the administration's trade agreements fo=
r what they consider lax labor and environmental standards favor the agreem=
ent with Australia.
Representative Charles B. Rangel, the New York Democrat, said in a statemen=
t on Tuesday that the two nations had complementary standards that would be=
nefit workers and the middle class.
While the pharmaceutical industry favors the accord because it breaks new g=
round for its exports, public health advocates say the measure may weaken A=
ustralia's ability to offer drugs at a low price through its national healt=
h system.
Kevin Outterson, a professor of law at the University of West Virginia, sai=
d that while the measure was not as intrusive as originally proposed, it st=
ill interfered in what had been "the gold standard for offering citizens th=
e most cost-effective medicines."
"The inevitable result will be a rising cost of drugs for the Australian pe=
ople," Mr. Outterson said.
With America's trade deficit continuing to climb - it jumped to a record $4=
6 billion in March - American manufacturers said the accord could open the =
door to an increase of as much as $2 billion in exports to Australia.
American dairy farmers were among the most vocal opponents of the agreement=
. Senator Russell D. Feingold, the Wisconsin Democrat, said the accord woul=
d mean a loss of dairy farms and also undermine the American dairy industry=
.
The American Farm Bureau Federation, which has been a strong supporter of t=
he administration and a benefactor of its subsidy policy, refused to endors=
e the agreement.
"It doesn't appear agriculture will play a role in trying to get this agree=
ment passed," said Christopher Garza, director of Congressional relations f=
or the farm organization.
The United States refused to open its sugar market as part of the agreement=
.




Associate Professor of Law
West Virginia University
304 293 8282
kevin.outterson@mail.wvu.edu
LL.M. (Cantab.)
J.D. (Northwestern)
SSRN Author Page:  ssrn.com/author=3D340746

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