American Farmers Unhappy With FTA

September 17, 2003, Australian Financial Review, by Mark Davis

United States farmers have little to gain from a free-trade agreement with Australia and will insist that any cuts to tariffs on sensitive agricultural products be introduced over long periods, according to the head of the main US farm group.

President of the American Farm Bureau Federation, Bob Stallman, who was in Cancun, Mexico, for the World Trade Organisation ministerial meeting, said there was a lot of sensitivity among US farmers about the negotiations for a free-trade deal with Australia.

Mr Stallman joined his Australian counterpart, the National Farmers Federation's head, Peter Corrish, to issue a joint statement calling for the WTO to free global farm trade as part of any new multilateral trade deal.

But in an interview with The Australian Financial Review, he was considerably cooler on the bilateral trade deal the Australian and US governments hope to negotiate by early next year.

"We see it as pretty much a one-way street," Mr Stallman said.

"It does give Australia an extremely good opportunity to access the American market.

"Does it really give American farmers great market opportunities in Australia under the best of circumstances? Not really," he said.

The US has relatively high tariffs and restrictive quotas on Australian farm products, including beef, lamb, dairy products, sugar and peanuts.

By contrast, Australia has virtually no tariffs on farm imports.

Mr Stallman said President George Bush and Prime Minister John Howard had made a political decision to move the free-trade agreement negotiations forward.
Since the collapse of the WTO talks on Monday, trade officials have been giving more attention to bilateral and regional trade deals.

Mr Stallman said his federation recognised that the US and Australia had made a political commitment to push ahead with an agreement but would be saying to the administration that at the end of the day, the federation "would have to be able to sell it to our producers and say there is something in it for them".

Asked what could be in an Australia-US FTA for American farmers, Mr Stallman pointed to measures to ensure Canberra's quarantine rules did not unfairly keep US products out of Australia, and to long phase-in periods for any cuts to US tariffs on sensitive products.

"We have a model for FTAs that does include lengthy phase-ins for the sensitive products. That model should be applied in these negotiations."

In its recent FTA with Chile, the US agreed to eliminate tariffs immediately on about 85 per cent of goods traded between them, including lamb, sheep, pork, wheat and most fruit and vegetables.

But the deal provides that tariffs on agricultural goods that are highly protected in the US will be phased out for Chilean imports over periods ranging from four to 12 years.

Tariffs on beef imported from Chile are to be phased out over four years, tariffs on poultry are removed over 10 years while there are 12-year phasing out periods for tariffs on dairy products, sugar, peanuts, cotton and tobacco.

Mr Stallman said this was the model his organisation, the peak body representing US farmers, wanted adopted in any Australia-US trade agreement.

The stance of the American Farm Bureau could present governments in Washington and Canberra with political problems in gaining domestic support for the agreement.

Australian farmers said long phase-in periods for any tariff cuts were not acceptable and that a good deal on agriculture must be at the heart of the FTA, which was also negotiating cuts to industrial tariffs and removal of restrictions on investment flows, trade in services and movement of people for business.

Both Mr Bush and Mr Howard will be eager to satisfy their respective farm lobbies on the FTA because of the political cycles in both countries. Australia faces a federal election next year while the US has presidential and congressional elections in November next year.