Bid to rescue US trade deal

24 October, 2003, The Australian, By Christine Wallace

George W. Bush has agreed to a proposal from John Howard to rescue the faltering Australia-US free trade deal. The Howard initiative, a response to repeated inadequate US offers on Australian farmers' access to US markets, will see Trade Minister Mark Vaile meet US Trade Representative Robert Zoellick to resolve differences and save the deal after the next round of negotiators' talks, scheduled for Canberra next week.

During the US President's 21-hour visit, Mr Howard also urged him to choose an Australian site for the maintainance and repair of the proposed joint strike figher, currently being developed to replace frontline warplanes.

The latest US farm trade offer, received a few days ago but so far not shared with peak farming groups, has emerged as a potentially fatal sticking point for the proposed free trade agreement.

"There has to be significant movement on agriculture for it to be a goer," Mr Howard said last night.

Mr Bush accepted Mr Howard's suggestion that Mr Vaile meet Mr Zoellick to resolve outstanding issues after next week's negotiating round in Canberra.

Mr Bush also committed to Mr Howard's reconfirmation of the Christmas deadline for the deal to be completed.

"If this is to come off, the agreement really has to come off at a negotiating level by the end of the year, or very early next year, otherwise this window of opportunity will be lost," Mr Howard said.

If not completed by year's end, the FTA will fall victim to next year's US presidential election timetable, due to difficulties getting it through Congress.

Mr Howard said that Australia was prepared to accept some phasing in of concessions made by the US in the deal.

National Farmers Federation president Peter Corrish has repeatedly told the Government that Australian farmers will not support the FTA if increased access to US markets does not happen quickly.

The Government will also be responsive to US requests concerning investment policy and services trade, Mr Howard said in his private talks with Mr Bush. Mr Howard raised the sensitive trade in audio visual services as an example where the Government was prepared to be "flexible" toward US interests.

Mr Bush said more transparency was required in Australia's Pharmaceutical Benefits Scheme, which keeps drug prices down.

Mr Bush made only low-key references to the proposed trade deal during his visit to Canberra yesterday.

It was trumpeted by Mr Bush during Mr Howard's visit to the Bush ranch in Crawford, Texas, in May.

Both men have repeatedly pointed to the proposed deal since then as a symbol for the closeness of the two nations.

Mr Howard and Mr Bush discussed the proposed deal and security issues at length in talks following the address to parliament.

However, in his address to parliament, Mr Bush referred only briefly to the proposed deal.

Just 44 words of the 20-minute-plus speech were concerned with the FTA. "Together with my country ... Australia is promoting greater economic opportunity," Mr Bush told the combined sitting of Australia's Senate and House of Representatives.

"Our nations are now working to complete a US-Australia free trade agreement that will add momentum to the free trade throughout the Asia-Pacific region, while producing jobs in our own countries."

Mr Bush was positive but economical in his references to the deal in comments at a press conference after the speech.
Mr Vaile revealed on Wednesday that the revised US offer on farm trade had been received by Australian negotiators.

However, despite strong political representations in recent months, the new offer is only an "incremental improvement" on its precedessor, according to Mr Vaile.

Australian officials earlier described the original US farm trade offer as "the big problem, too little, across the board".