Vol 45 No 1 - Australian Fabian Society

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PAGE 14BOOK REVIEWThe Australia-US Killer Agreement.Graham Dunkley reviews How to Kill a Country by Linda Weiss, ElizabethThurbon and John Mathews (Allen & Unwin, Sydney, 2004).Australian Fabian NewsJanuary–March 2005In arguing that the recent Australia/USFree Trade Agreement (FTA) could ‘kill’our country, at least as a progressivesociety, this book makes one of the moststarkly audacious claims in Australianscholastic history. I have equallyaudaciously insisted that globalization isnot inevitable: compliant governmentsare committing ‘sovereignty suicide’.How to Kill a Country is not theinflammatory tract it sounds but adetailed analysis based on a wide rangeof research, the Senate inquiry into theFTA and the authors’ own previous work.In the area of quarantine, for instance,they use current policy documents,along with industry and NGO critiques,to show that the government, throughBiosecurity, its new quarantineauthority, has been reducing regulatorystandards of our hitherto powerfulquarantine systems, supposedly in linewith liberalisation principles. This, theyshow, is foolishly risky, going againstmuch industry and CSIRO advice insome cases.The FTA establishes two joint bodieson Sanitary and Phytosanitary (SPS)matters (i.e. quarantine and related), butit remains unclear how these willoperate, how they will relate to ourexisting institutions and what line USmembers will push. But their main jobswill be to scrutinise our existingstandards for trade-disruptive featuresand to promote increased trade. This canreally only be achieved, ultimately, byadmitting products which previouslywere excluded through quarantinestandards.However, I take issue with the authors’claim that the WTO supports ourquarantine standards and that theCanadian Salmon case only went againstus on a technicality. The WTO doesallow genuine quarantine (thankgoodness for that!) but requires‘scientific’ risk assessment. Free Traderstake the view that most countriesmaintain more stringent quarantineregulations than are necessary foradequate protection and this reducestrade (oh, horror!). But in my book, FreeTrade I show that in most WTO SPScases, including the Salmon case whichforced us to import hitherto banned livefish, both sides presented strongscientific reports. The WTO Panel ineach case favoured the side wantingreduced quarantine regulations.Yet as Weiss et al rightly point out,under FTA the Yanks have clearlyindicated that they wish to ‘do better’than under the WTO, and indeed, as Ihave shown, bilateral agreements tendto be much more ‘liberalising’ thanmultilateral ones like GATT and APEC.So, under the FTA’s SPS arrangements USdelegates are likely to challenge manymore of our quarantine standards, whichare already under attack world-wide andvia the WTO.The story is similar in the other threeareas studied. In the case ofpharmaceuticals the authors show thatUS drug trans-national companies(TNCs) are keen to bash up anyarrangements anywhere in the worldwhich threaten their monopoly andreduce drug prices. This is done bytrying to undermine schemes like ourPBS and to strangle competition from‘generic’ rivals. Although FTA leaves thePBS in place (it does not actually namethe PBS), it proposes a newadministrative structure with USinterests represented. The authors alsoconvincingly debunk the TNC claimthat high medicine prices are to coverresearch costs, on the grounds thatindustry profits are huge and mostcorporate expenditure is on marketing.Under FTA administrativearrangements the new joint body, theMedicines Working Group, is likely tobe a platform for US challenges to PBSpolicies, and the goal of ‘innovation’has been substituted for current socialobjectives. Weiss et al feasibly concludethat the result will probably be a shiftfrom our socially-based system to a USstyleprivate monopoly basis, yet,ironically, some American authoritiesare now favourably studying schemeslike ours!In the area of governmentprocurement, we have signed on to thistype of agreement for the first time,having long resisted the WTO version(which is voluntary) on grounds that thecosts would be greater than the benefits.This agreement means that althoughtheoretically Australian firms will nowwww.fabian.org.auGraham Dunkley is a Research Associate atthe Victoria University of Technology andauthor of The Greening of the Red (PlutoPress/AFS, 1992)and Free Trade: Myth, Realityand Alternatives (Zed, 2004).be able to tender for US governmentprojects, in practice home preference stillapplies in the US, formally in some areas,informally in others, and Australiansuppliers will mostly be of similar size toUS ‘small’ enterprise which areparticularly preferenced. Yet we have toopen our public tenders to giant USsuppliers. Weiss et al have probablysomewhat over-stated their case as wehave reserved our right to maintainsome schemes such as the AustralianIndustry Involvement programme fordefence procurement.And so the story goes on. In the area ofintellectual property the FTA moves ustowards the US system, which will costus a fortune in extra royalties. Alreadyevidence is mounting in favour of Weisset als’ case. On 3 August 2004 an experttold the ABC (‘Australia Talks Back’) thatif the FTA caused our medicine prices torise to even half the US levels, which islikely, this would nullify all other(assumed) benefits of the deal. Somemonths later the US head of Pfizerthreatened to withhold some drugs fromAustralia if we did not begin payinghigher prices (Age, 18 Nov 2004:4). Once
Australian Fabian NewsJanuary–March 2005the FTA is under way we can expectmuch more pressure of this sort.Yet the frightening thing is that thisbook only tells half the story, albeit verywell. It does not tell the story ofmanufacturing, agriculture, services,investment or audio-visuals, except forthe odd note on some of these. It isbriefly mentioned that we have openedour entire farm sector to the Yanks butthey have kept some of theirs wholly orpartly closed, notably with the exclusionof sugar and the retention of safeguardmechanisms. Few commentators,including this group, have analysed howour car parts industry could be hit, orhow the car market may be inundatedwith Yank tanks and ‘pick-ups’ (a termwe don’t use – as yet!).The book does not explain how wehave opened most, though not all, of ourservices sector to giant US servicecompanies which dominate many worldLettersDear Editor,BOOK REVIEWmarkets, the US being the world’s largestsingle service exporter (although the EUcombined is larger). It is not mentionedthat we have agreed never to increaselocal TV quotas, whose levels are alreadyvery low in pay-TV, and never to use filmquotas. Indeed, one obscure clauseallows dilution of local quotas where abroadcaster introduces the newtechnique of ‘multi-channeling’.Nor does the book discuss in muchdetail overall assessments of the FTA.The incredible story is that of the halfdozen major mainstream modelingassessments of FTA benefits, only onestudy, that by CIE in Canberra, findsstrongly favourable results – and this isthe one the government uses of course,a situation straight out of Yes Minister.All the other studies show minimalbenefits or actual losses to Australiafrom the FTA. The most critical study,that by National Economics (NE) inDear Editor,PAGE 15Melbourne, shows polar oppositeresults to CIE. Whereas CIE finds 0.7 percent GDP gains per annum (arguablymodest anyway), NE finds a 0.39 percent loss; where CIE claims 30,000 newjobs, which the government is nowtrumpeting, NE claims a loss of 50,000jobs per annum for some years to come.Time will tell whether the optimists orpessimists are right, and most of Weiss etals’ concerns are measurable. If theauthors of this book are right, and I thinkthey are, we should see some adverseresults relatively soon. In the meantime,read the book and watch-out! ◆With the furore over Mark Latham’s leadership still runningrampant, the deluge is far from over for the ALP. Whatremains unanswered after reading the post-election FabianSociety/Arena Publications Blue Book After the Deluge is thequestion of what economic policies Labor is to offer. Talk ofpast economic achievements is not the way forward. Whocan be seen to be the Labor party’s core constituency? Whathas happened to the traditional Labor values of social justiceand social equity?Visiting UK Fabians have suggested at AFS meetings thatthe answer to these questions may lie in the example of NewLabour’s renewal and rejuvenation of its parliamentaryrepresentatives. Will the Australian Labor party have thecourage of its convictions and refuse to re-endorse memberswho have passed their used by date – something the muchtouted party reform was said to make happen?The leadership vacuum remains and unlike the 1970’s,when Bob Hawke was the Messiah in waiting, there is nonew Messiah even remotely on the horizon. For this AFSmember and lifelong Labor supporter, there is no light at theend of the tunnel, let alone a ‘light on the hill’.Michael FreemanI am angry, disappointed and frustrated with the lack ofthought leadership on what is wrong with the Australianeconomy and how to fix it. I am angry with the ALP for notproviding swinging voters with a choice.I want political leaders that can demonstrate commitmentand enthusiasm for engaging with their constituencies totake up the challenge and adventure of working together tomake the world a better place.I am looking for leaders who can exude passion andexcitement in the challenge of reforming the sevenfundamental flaws in the economy that make it inefficient,inequitable, exploitive, covert, alienating, insensitive andundemocratic. I am looking for leaders who can teach theignorant, inspire the complacent and lead the ambitious onhow these fundamental flaws can be overcome to improvethe well being of all.I invite Fabians to share my anger on how Australia’stalents, knowledge and abilities are being squandered toserve alien interests, exploited by the powerful and thenderided by the influential. Correcting structural flaws in theeconomy would ameliorate many populist politicalconcerns, including funding for health, education, pensionsand housing, buying back the farm, reducing the currentaccount deficit, and renewing the nation’s infrastructure tomake the Australia efficient, competitive and not just a luckycountry but the best place in the world to live. Where are ourleaders to take us there?Shann Turnbullwww.fabian.org.au
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Vol 45 No 1 - Australian Fabian Society

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