Sugar Demands Sour Free Trade Talks
Australian Financial Review, December 8, 2003, By Tony Walker Washington With Mark Davis
Powerful United States farm-state senators have stepped up their demands that sugar be removed from free-trade negotiations, in a sign of looming difficulties in persuading US Congress to approve a US-Australia free-trade agreement.
Senators from Louisiana and North Dakota have requested an urgent meeting with US President George Bush to argue against the inclusion of sugar in the trade agreements.
The move will raise concerns in Canberra that even if the Australian government and the US successfully conclude a deal to free up trade between the two countries, the Bush administration will still face resistance from powerful domestic agricultural interest groups.
In a US election year such resistance could be enough to persuade Congress to reject the free-trade agreement.
Agitation by US congressmen over sugar's inclusion in bilateral trade deals coincides with an announcement that negotiations on a US-Australia FTA will go into a sixth round early next year.
US and Australian trade negotiators said they were in the home stretch and were confident they would complete their work on a draft agreement by the end of January.
The document would then be referred to Congress for a statutory period of 90 days before it could be signed into law.
In a letter requesting a meeting with Mr Bush, senators John Breaux and Mary Landrieu of Louisiana and Byron Dorgan of North Dakota protested about a free-trade agreement under negotiation with Central American states. But it would appear their concerns are broader.
In the letter, the three senators noted that US policy was to balance domestic sugar production with domestic demand. They said this would be destroyed by any trade agreement that would dramatically increase sugar imports to the US.
The American sugar lobby is the most vociferously opposed to free-trade agreements of all US farm representatives.
Australia exports only 87,000 tonnes of sugar a year under its preferential tariff-rate quota but this is a fraction of its total exports of about 4 million tonnes.
Australian sugar producers are pressing the Howard government to ensure that any FTA commits the US to dismantling the existing quota restrictions on Australian access to the big American market.
Australian and US negotiators would not be drawn on issues that remained to be resolved. It is understood additional work is required on phase-in arrangements for increased agricultural exports to the US.
There is also work to be done on branding and patent issues for pharmaceuticals and a legal framework to preserve US access to the Australian market for its audio and visual products.
Stephen Deady, chief Australian negotiator, indicated no items would be excluded from a free-trade agreement although the two sides agreed early on that domestic subsidies, a particular Australian grievance, would be handled under the faltering Doha round of trade negotiations.
"We are looking for a comprehensive package, and when I say 'We're in reach', that's what we're in reach of: a comprehensive outcome that delivers a very balanced and far-reaching FTA," Mr Deady said.
"We have ambitions right across the board. Agriculture's central to that; it's not the only part of Australia's ambitions [but] that's what I mean: the whole box and dice, that's what's in reach for us."
Mr Deady said he would be returning to Australia to brief Trade Minister Mark Vaile and other ministers. He would also be talking to industry groups.
Senator Dorgan has been leading agitation against a US-Australia FTA. Last week he demanded the release of a report by the International Trade Commission on the potential impact of a US-Australia deal.
"Australia has an aggressive state-run wheat board, enormous surplus sugar production, and cattle, beef, and dairy industries that are itching to get into the US market," he said.
"Our farmers deserve to know what possible injury is in store for them if this agreement goes through. The White House needs to declassify this report.
"Trading away our agricultural sector just to get some more TV shows into Australia doesn't make any sense.
"Family farmers are not a negotiating chip. The notion of trading away the interest of family farmers just to get Fear Factor on Australian TV stations is ludicrous."