11 February 2004

Govt unable to quantify free trade deal

The fluctuating exchange rate made it difficult to put a dollar figure on the exact economic benefit from the Australia-US free trade agreement (FTA), Treasurer Peter Costello said.

Fisheries Minister Ian Macdonald said the economic benefit would be worth around $4 billion, a figure based on a previous government-commissioned report which did not take account of the absence of sugar from the deal.

The report - quoting a figure of $US2 billion - was also released when the Australian dollar was considerably weaker.

Mr Costello told ABC radio the FTA deal was overwhelmingly in the national interest but refused to be drawn on its exact economic worth.

'A benefit of $US2 billion on an exchange rate of 50 (US) cents is different to a benefit of $US2 billion on an exchange of 78 (US) cents,' he said.

'Of course these things move.

We know they move. We just wonder how much that US$2 billion is worth with sugar excluded, and beef postponed by 18 years. With the AU$ expected to reach US$0.80 within six weeks how will that effect the FTA?

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