International Trade Daily | August 31, 2001 | By Chris Rugaber
Numerous agricultural groups have expressed their opposition to a free trade agreement (FTA) with Australia in recent letters and visits to the Bush administration, in anticipation of an upcoming visit from Australian Prime Minister John Howard on Sept. 10. In addition, Senators Max Baucus (D-Mont.) and Charles Grassley (R-Iowa), the chairman and ranking member of the Senate Finance Committee, respectively, have recently qualified their support for such an agreement in their own letter to the White House.
A group of 34 agricultural organizations began an informal campaign against a U.S.-Australia FTA with a letter to President Bush Aug. 23. Signatories to the letter include the American Farm Bureau Federation, the California Grape and Tree Fruit League, the National Potato Council, and the U.S. Meat Export Federation, among others.
The National Cattleman's Beef Association and the National Milk Producers Federation, while also signing the letter, sent separate letters addressing their specific concerns to the White House Aug. 28 and Aug. 27, respectively.
Health-Based Trade Barriers Cited
In their Aug. 23 letter, the agricultural groups expressed their opposition to FTA negotiations "prior to the resolution of outstanding sanitary and phytosanitary (SPS) barriers that inhibit U.S. agricultural exports to that country." SPS barriers generally involve health and quarantine measures. Entering negotiations without resolving those issues would "send the message that the United States is willing to tolerate unfair trade restrictions," the letter said.
The letter cited Australian SPS restrictions on U.S. chicken, pork, corn, California table grapes, Northwest apples and other agricultural products. As an example, the letter says that "The table grape issue involves a never-ending risk assessment process where Australia continues to ignore scientific arguments."
While Australia "claims to have one of the most transparent SPS risk assessment processes in the world," the letter continues, it has "a miserable international reputation" and "constantly deviates from its official procedures, and invents new 'reviews' that endlessly delay import decisions."
The letter concludes that "We question [Australia's] commitment to uphold the principles of the WTO Agreement on Sanitary and Phytosanitary Measures," and urges that all SPS issues be resolved to the "mutual satisfaction" of the United States and Australia "before a commitment is made to launch FTA negotiations."
Australia proposed an FTA earlier this year, and Secretary of State Colin Powell called it "a good idea" in March. A coalition of U.S. and Australian businesses launched a lobbying campaign for it in July, but U.S. Trade Representative Robert Zoellick said earlier this month that it ranked behind several other trade priorities.
Separately, a U.S. trade official said Aug. 30 that U.S Trade Representative Robert Zoellick would meet with Australian Trade Minister Mark Vaile in Punta Del Este, Uruguay, during the Cairns group meeting Sept. 3-5. He did not know if the U.S.-Australia FTA would be on the agenda.
'Our Trade Relationship Is Broken.'
In an interview, Audrae Erickson, an international trade specialist for the American Farm Bureau Federation, listed numerous examples of what her group considers Australia's unfair SPS trade barriers. For example, Australia is the only country in the world that requires the United States to "heat and treat" its corn and feed grain exports before they are admitted, she said. In addition, Australia regularly ignores the "regionalization principle" of the WTO SPS Agreement, she said, which holds that an attempt should be made to accept products from pest-free areas of countries where pests or diseases have afflicted some agricultural producers.
For example, Erickson acknowledged that some Florida citrus producers are occasionally hit with a "citrus canker," which is a type of fungus, but that Australia has restricted imports of all Florida citrus products, even though the United States continues to ship some Florida citrus to the rest of the world, she said.
Generally, the American Farm Bureau Federation would like to reach an FTA with Australia, she added, but not until these and other issues are resolved, some of which date back almost twenty years.
"Our trade relationship with Australia is broken," she said. "Why sign a free trade agreement with them when they're violating past agreements?"
Erickson added that her organization and other agricultural commodity groups had met in recent weeks with officials at the Office of the U.S. Trade Representative and U.S. Department of Agriculture.
Cattlemen, Dairy Producers Opposed
Meanwhile, the National Cattlemen's Beef Association (NCBA), which represents cattle farmers and ranchers, listed its specific objections to a U.S.-Australian FTA in an Aug. 28 letter to the White House. In addition to its support for resolving the SPS issues, the NCBA said that it opposes "increased bilateral access to the U.S. beef market for Australia unless such access is part of a broader trade liberalization initiative."
The NCBA's letter, while acknowledging the importance of trade to the domestic beef industry, argues that "there is a perception throughout the U.S. industry that we have granted more access than we have gained in past negotiations."
Therefore, the NCBA "will not support increased access to the U.S. beef market" until greater market access and tariff reduction "is achieved in other major beef importing countries," which the NCBA believes "can only be achieved through comprehensive multilateral WTO negotiations," rather than bilateral discussions with Australia.
In fact, the NCBA wants Australia's support for tariff reduction in multilateral negotiations, and is worried that it may not have it if a U.S.-Australia FTA is negotiated, said NCBA's chief economist, Chuck Lambert, in an interview.
Lambert said that full access to the U.S. market would reduce Australia's incentive to help the U.S. open other closed beef markets, such as Japan and South Korea.
Similar arguments were made by the National Milk Producers Federation, which said in its Aug. 27 letter to the White House that "By obtaining unlimited access to the vital United States dairy market, Australia ... will simply forego any efforts to open additional markets around the world."
Senators Support Resolving Issues
Meanwhile, Sens. Baucus and Grassley wrote the White House Aug. 27, urging President Bush to "explore the possibility" of launching FTA negotiations when Prime Minister Howard visits Sept. 10. However, the Senators also wrote that "Resolving several outstanding agriculture trade issues would help pave the way for a free trade agreement," and listed "sanitary and phytosanitary barriers to U.S. exports ... such as pork, poultry, table grapes and corn" as examples of those issues.
"We believe serious efforts to address these issues would assist us in increasing public support for a U.S.-Australia FTA and urge you to make discussion of these issues a top priority during the visit of Prime Minister Howard," the letter said.
Baucus previously has been a strong supporter of a U.S.-Australian FTA, calling it a "tremendous opportunity for trade liberalization" in July. In May, he introduced a bill (S. 935) providing the Bush administration "fast track" authority to negotiate FTAs with Australia, New Zealand, and South Korea.
A Senate aide said that Baucus was still "very supportive" of an FTA with Australia, but that he and Grassley "clearly share the concerns" expressed by the agricultural groups.
He added that the agricultural issues could be resolved in the context of FTA negotiations, and that Baucus did not consider their resolution a precondition for the launch of bilateral talks.
In fact, the aide said that Baucus was concerned that the Bush administration was emphasizing multilateral issues such as Trade Promotion Authority (TPA) and a new WTO round at the expense of bilateral negotiations. Baucus, the aide said, would rather see greater emphasis on bilateral talks, and was "troubled" by indications from the Bush administration that initiating discussions with Australia might undermine the case for TPA.
The Senate aide added that if negotiations weren't launched during Howard's Sept. 10 visit, it would be "unlikely" that they would be initiated this year. The next Asian Pacific Economic Cooperation (APEC) forum, currently scheduled for Oct. 19, is the only other possible venue for an announcement, he said.
Lamb Dispute
Baucus and Grassley also cited in their letter the ongoing dispute over a lamb import restriction imposed by the United States in 1999 against Australia and New Zealand. The restriction was struck down by the WTO, and that ruling was upheld by an appellate panel May 1. Australia and New Zealand currently face a deadline of Aug. 31 to request WTO arbitration in the dispute. When asked whether it would be settled this week, the U.S. trade official speaking on background Aug. 30 said "We'll see ... We're working hard."
Copyright c 2001 by The Bureau of National Affairs, Inc., Washington D.C.International Trade Daily:
