Will a US free trade agreement be good for us?

A presidential favour to Howard is not necessarily a favour to Australia. That question will only be resolved when the fine detail of AUSFTA is revealed.

In the meantime, it is interesting to look at what the US corporate promoters of AUSFTA have been saying about the proposed agreement, and what was reported about what Bush said in his private meeting with Howard in Canberra last week.

The American-Australian Free Trade Agreement Coalition (AAFTAC) put out a report in July that said: 'It is apparent that the US agricultural subsidies, which Australia wants reduced or eliminated, will most likely be addressed as part of the multilateral process rather than part of an FTA.' (We know what happened at the Cancun trade meeting: the developing countries were told, by the US and the EU, to open up their financial markets and service industries to the developed countries and forget about any liberalisation of agricultural markets. As a consequence, the Third World, led by India and Brazil, walked away from the global trade negotiations.)

The AAFTAC report also said: 'Recent analysis by the Centre for International Economics found that US exports to Australia would increase by $US1.9 billion ($A2.7 billion), compared with an increase in imports from Australia of $US1.2 billion.' (Is this infinitesimal gain worth risking our film and television industry and Pharmaceutical Benefits Scheme for?)

The report went on: 'A US-Australia FTA will have some negative impact on other trading partners as US exports displace those of other countries in the Australian market, and Australian exports displace those of third countries in the US market.' (Nobody gets hurt except our other trading partners. Will they passively accept this?)

Of course, the real gains for the US in the AUSFTA lie elsewhere - in opening up Australia's services industries, including public services, to US investors where most of the opportunities lie with the US and most of the risks lie with Australia.

I am getting both alarmed and alert about the whole FTA thing. More later when I've done a little digging, but I doubt the benefits advertised are worth giving away the PBS, the cultural diversity rules, or US access to the services sector.

I also need to do a little research on the treaty-making power. I'll very alarmed and alert indeed if the treaty-making power authorises our Man of Steel to ratify an FTA (as was done with the Thai and Singapore FTAs) by royal, I mean prime ministerial, preorogative.