Asia Pulse, Thursday October 2, 2003

CANBERRA, Oct 2 Asia Pulse - Australia's chief negotiator in the FTA, Steven Deady, has told a Senate committee he was trying to enable Australian businesses to sell to American government agencies.

Australia was also pushing for the US to cut export subsidies, especially into markets where Australia had major interests.

But he said the FTA may not be delivered by the end of the year as promised by Prime Minister John Howard and President George W Bush.

FTA talks have been underway most of the year, although formal offers between the two countries were not exchanged until early July. Agriculture is continuing to be a major problem, with Australia demanding major access to American markets, particularly in areas such as beef, dairy and sugar.

Mr Deady, giving evidence to a Senate committee, said agriculture would be a key sticking point between the two countries. But he revealed Australia's ambitions for the FTA were higher, with the Buy America Act - which effectively prevents overseas companies from supplying US agencies - in his sights.

"We are negotiating very hard in (the) government procurement chapter ... to allow for access for Australian business to sell to the US government," he said.

Mr Deady said he was pushing for a list of particular agencies, and thresholds of supply, for Australian businesses.

He also revealed Australia was trying to target the export subsidies used by the US to under-write its farm sector. Although the US Farm Bill, which provides the bulk of support to American farmers, was not being targeted, Mr Deady said export subsidies were being examined.

"We're looking to get some agreement on subsidies into third markets of importance to Australia," he said.

Despite the progress in talks, Mr Deady suggested the end-of-year deadline would not be met.

Australia has sent a second request over agriculture to the US, while an extra week of negotiations have been set down for Washington in early December.

Mr Deady said although negotiations were going well, there was still some gaps between the two countries that would take time to overcome. "The key driver for Australia is a big deal, is a good outcome from the negotiations, and the timing is secondary," he said.

Mr Deady said quarantine standards would not be reduced in any FTA. He said it was more likely that standards would improve, as both Australia and the US were committed to high levels of quarantine protection.

Mr Bush will visit Australia later this month, with the FTA likely to come up in talks with Mr Howard.