Reuters | By Michelle Nichols | Feb. 9, 2004
CANBERRA, Feb 9 (Reuters) - Australia's free trade agreement with the United States drew a mixed response on Monday with the nation's sugar industry angry at being sacrificed for a deal that business groups praised as a boost to the country's economy.
The deal left Australia's farm sector angry as a whole over only marginal gains after talks which began in March 2003 stumbled repeatedly over agriculture.
"It's extremely hypocritical," National Farmers Federation President Peter Corish said in a statement.
"The United States is a huge agricultural exporter and demands access to overseas markets, but continues to hide behind a veil of protection in its own market."
The United States has refused to allow more access for Australian sugar exports, but agreed to reduce tariffs on Australian beef over 18 years and increase the duty free quota for dairy products.
Australia, a major exporter of beef, grains and sugar, had long sought greater access to the large U.S. market but American farmers saw a bilateral deal with Australia as offering them little gain due to the difference in the size of the markets.
Australia's beef industry criticised an 18 percent increase in its quota access over 18 years, to accompany the tariff reduction, as a small increase and "disappointing" gain.
But Prime Minister John Howard said the agreement, which was struck overnight in Washington in tense negotiations, offered too much to the Australian economy for it to be lost on the single issue of U.S. market access for sugar.
Trade between Australia and the United States totals A$28 billion (US$21.5 billion) a year and analysts have estimated the free trade deal could add between A$2-4 billion to the Australian economy.
"I came to the conclusion that it would have been against the national interest to give up a deal that is going to be of enormous benefit to the rest of the economy because we couldn't get something on sugar," he told the Nine Network.
The free trade negotiations between the close allies began last March and were made a priority of the Bush administration after Canberra sent troops to the war on Iraq.
Howard and Bush were keen to seal a deal so it could be voted on by the U.S. congress before U.S. presidential elections in November and a likely Australian election in late 2004.
Australia's main opposition Labor party said concessions made on agriculture had damaged Australia's position in world trade negotiations, which stalled after collapsing over agriculture and other issues in Cancun, Mexico, nearly five months ago.
"Labor is concerned the government has cut a fast deal not a good deal for Australia," Labor's Trade Spokesman Stephen Conroy said in a statement, adding that he will refer the deal to a Senate committee for scrutiny.
Unlike the United States, the deal does not need approval by the Australian parliament, although some legislation may need to be passed to implement sections of the agreement.
Alan Oxley, director of lobby group Australian Business for a Free Trade Agreement with the United States, said the deal would add billions to trade between Australia and the United States and that sugar was a small sacrifice to make.
The Australian Chamber of Commerce and Industry said the deal has given Australian business substantial mew market access opportunities "in one of the world's most dynamic and innovative economies" and benefited the nation's whole economy.
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