Acting Smart on Trade

The post 1945 dismantling of most trade barriers has been a key to the unrivalled prosperity the world now enjoys.  Although agriculture has been left out of the liberalisation process, Australia has been a major beneficiary.  Local industries that were protected from imports vigorously opposed the dismantling our own barriers have, in fact, adapted to competition and emerged stronger.

However, the world's major developed nations -- which largely mean the USA and European Union -- are at loggerheads over how to proceed with further trade liberalisation on a global or multilateral scale.

The EU, under French influence, has resisted any attempts to dismantle its notorious agricultural policies.  These policies deny European market access to efficient producers like Australia.  The EU guarantees its own farmers high prices which also bring massive surpluses in many agricultural products.  These are dumped on world markets and depress prices.

Other issues preventing progress are the insistence by the EU that further liberalisation should be linked with policies like workplace reform that are both controversial and difficult to police.

These developments have brought a hunt for alternative ways forward.  Australia, like other countries, is exploring possible free trade agreement with individual countries.  In our case, one with Thailand is on the cards, but the most important prospect is the USA.

This would integrate the Australian economy with the world's largest and most technologically advanced economy.

Free access into the US market offers our manufactures and service providers the economies of scale they need to keep their costs down.  For consumers it means cheaper goods and services.  These cheaper goods and services will in part be due to direct imports from the USA.  But overwhelmingly they will be cheaper domestic supplies resulting from producers achieving lower costs that competition forces them to pass on.

Australia's opportunity for a free trade agreement with the USA is the envy of many countries.  Nevertheless, there is a usual chorus of dissent from vested interests.

Some vested interests, like the actors' union, want to see continued restraints on the employment of foreign artists in Australia.  Yet, the internationalisation of Australian artists has opened up unheard of opportunities for our local talent.  Led by Russell Crowe and Nicole Kidman our acting profession has achieved a global identity that nobody would have anticipated 10 years ago.  Special privileges for Australian artists and tv programs are unnecessary.  They also bring increased costs that are passed onto Australian consumers in dearer products and services.

Some opponents of a US-Australia free trade agreement offer furphies like the claim that this will require us to pay more for pharmaceuticals.  Much of this and other opposition reflects knee-jerk anti-Americanism.  Of course, those opposing all things American, turn a blind eye to the hi-tech equipment, gadgets and services they use.

Australia's transformation into an internationally oriented economy with reduced trade barriers has turned us into one of the world's strongest and most prosperous economies.  Further reductions in our trade restraints are the way forward.  With the impasse in multilateral trade negotiations, free trade treaties with individual countries, especially with the USA, would allow us to move forward.

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