Friday, March 05, 2004

All Our Trade Will Be Free but Some Will be More Free than The Rest

[Labor trade spokesman Stephen Conroy] said the [Australia-United States Free Trade Agreement] also appeared worse for Australian farmers than first anticipated, with fine-print clauses giving America the ability to reimpose tariffs on Australian beef and some horticultural products if US prices dip significantly below average levels.

Well, he would say that, wouldn't he? Here's what the agreement actually says, in Chapter 3: Agriculture. First there's this interesting article:

1. Notwithstanding Article 2.3 (Elimination of Duties), a Party may impose a measure in the form of an additional duty on an originating agricultural good as provided in that Party’s section of Annex 3-A (Agricultural Safeguard Measures), provided that the conditions in paragraphs 2 through 6 are met. The sum of any such additional duty and any other customs duty on such good shall not exceed the lesser of:

(a) the prevailing most-favoured-nation (“MFN”) applied rate of duty; or
(b) the MFN applied rate of duty in effect on the day immediately preceding the date of entry into force of this Agreement.

2. The additional duty under paragraph 1 shall be set according to each Party’s Schedule to Annex 3-A.

In other words, although both parties have agreed to eliminate duties, either party will be able to impose dutiers on agricultural goods, as long as the duty has been set out in the agreement and a few other conditions are met.

Here's Australia's list of agriculutural goods which might in future be subject to Agricultural Safeguard Measures:

And here's a summary of the US' list:

Onion Powder, Dried Onions, Garlic Powder, Dried Garlic, Packaged Whole Tomatoes, Tomato Paste, Tomato Puree, Asparagus, Pears, Apricots, Peaches, Canned Fruit Mixtures containing Pears and Peaches, Canned Fruit Mixtures containing Oranges or Grapefruit, Frozen Orange Juice, Unfermented Grape Juice and Must and Tomato Sauces.

It's quite a revealing list, when you consider that the Agreement has to be ratified by the US Congress. Until I saw it I had no idea that the US' onion and garlic lobby was so influential.

Afterword: there's more on this topic from Josh Gordon in The Age.

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