Ausbuy

Free Trade vs Fair Trade

July 22nd, 2007

In 2007 Australia began talks with Japan, pushing ahead before giving the public and concerned organisations a chance to respond to their feasibility study. Japan has huge tariffs protecting its agricultural industry, these range from 30% to more than 700% and it has already been reported that Japan has no interest in lowering these with any Free Trade Agreement. If this is the case it is hard to identify where Australian farmers will receive any benefit from such a deal.

As in many Asian countries, rice-growing has a strong cultural and social significance in Japan and we would think it unlikely the Free Trade Agreement negotiations will manage to breach the 700% tariff. Currently Australian wheat faces a 250% tariff, although Japan supplies only 5% of its domestic grain requirements. Grain is currently growing in popularity in Asia at the same time as we are facing shortages due to this increase in demand and to the Australian drought, so Australian wheat will be an important bargaining chip in these agreements.

Our government is also working on a comprehensive Free Trade Agreement with Chile, Australia’s fourth largest trading partner in South America. Around 120 Australian companies trade with Chile and 70 have a presence there. With investments worth $2.78 billion and growing, we are Chile’s fifth largest investor. Chile has more than $680 million invested in Australia.

We are still in the process of developing a Free Trade Agreement with China even though we know that competition from China costs Australian manufacturers billions of dollars each year. Further opening up this market is questionable in the extreme. The Australian Manufacturing Workers Union has recently conducted a survey (available at www.amwu.asn.au) that reports that should such an agreement come to fruition, Australia will lose 158,000 jobs.

The Government has also announced a study prior to talks with South Korea, the United Arab Emirates, Malaysia and the Pacific Islands. Ausbuy continues to be concerned about copyright issues and arrangements regarding Australia’s donated blood fractioning, our PBS system and local media content legislation as a result of the Free Trade Agreement with the USA.

Australia’s trade deficit has grown with each country we have signed a Free Trade Agreement with. Surely this means we should halt the negotiations of further contracts and possibly provide the six months notice required to cancel an agreement. Despite this our government has decided to expand Australia’s Free Trade Agreements aggressively. We do not believe that this is in Australia’s best interests.

Anyway, how can we say that we are committed to the Doha Round of trade negotiations, which are in favour of multilateral trade agreements, whilst pursuing bilateral free trade agreements which restrict free trade. This seems to be contradictory.

The title “Free Trade” is misleading. These agreements are the result of negotiations which regulate trade between two countries, in which each country aims to protect its own vital political and economic interests. Many of the claims, which our bureaucrats in Canberra see as benefits, are actually agreements to allow Australia to export goods in to the other country’s market in return for giving this country similar access to our market. Sometimes we don’t even produce these goods. Unfortunately, our negotiating team could be seen as amateurs in a very professional world. There may be political and diplomatic reasons for accepting these seemingly ridiculous agreements about which the Australian public know nothing. It is very hard to find economic justification for these agreements.

Our major exports are mineral, agricultural, produce, and increasingly energy. The sale of minerals, and such items as gas and oil, take place in a world market where the price is set by supply and demand, sales are not dependent on Free Trade Agreements. The sale of agricultural products is one area where we would like free access to the American, Japanese or Chinese markets. However, these areas are always excluded from Free Trade Agreements. We give, but do not receive.

Another problem about Free Trade Agreements is that they are held by the High Court to supersede our national laws - despite the fact that the Australian people never voted for them. You could almost call it altering the constitution by stealth.

These Free Trade Agreements are loudly supported by theoretical economists and media pundits. We would feel more comfortable if we had a robust and public debate in which the issues were identified and addressed. Trade is the lifeblood of Australia, but it must be on reasonable terms which meet the needs and aspirations of the Australian people. Agreements which degrade our quarantine laws, involve us paying inflated prices or unfair royalties, are not in the Australian interest.

China FTA Signals End for Fresh Aussie Vegetables

Peak grower body AUSVEG, has warned that a comprehensive Free Trade Agreement with China has the potential to destroy Australia’s fresh vegetable industry.

AUSVEG expressed its concerns in its recent submission to the China-Australia Free Trade Agreement feasibility study, a submission that seems to have been largely disregarded according to AUSVEG Chairman, Michael Badcock.

Michael said that the Chinese vegetable industry is 100 times larger than the Australian industry and that Australian growers could find it extremely difficult to compete, unless the Free Trade Agreement contained significant safeguards for Australian vegetable producers.

“Australian vegetable growers must meet stringent food safety and quality regulations ensuring vegetables are free of pesticides and disease and safe to eat. These necessary requirements are important to ensure Australian consumers have access to fresh food that’s good for them,” he said.

“Chinese producers on the other hand, do not face the same Quality Assurance requirements and have access to cheap labour and are often able to land fresh vegetables in our markets at significantly cheaper prices.”

Michael Badcock stated recent examples of WA export carrots and cauliflowers which have faced up to a 30% reduction in export volume in 2003-4 due to Chinese product replacement.

An Free Trade Agreement with China will potentially open the door for a flood of cheap vegetables into Australia. “Growers are already under stress from a market dominated by only two major retail players, a removal of the 5% tariff on many vegetable products would be the straw that broke the back of many growers,” Mike said.

“Surely our government wants to ensure Australians have access to fresh, flavoursome and wholesome fresh vegetables.”

AUSVEG calls on the Australian Government, in its Free Trade Agreement negotiations, to protect Australia’s $6.5 billion horticultural industry by declaring vegetables a “no go” zone.

Regional communities will be the hardest hit if a comprehensive Free Trade Agreement with China proceeds.

Logo Loyalty

Ausbuy would like to re-address the importance of recognising and using our logo.

Ausbuy is a national not-for-profit organisation dedicated to the support of Australian owned companies through assisting and promoting these companies and encouraging and educating consumers to purchase from these companies. We have a strong media presence, having featured on A Current Affair and Today Tonight numerous times over the past year. This allows us to bring the plight of Aussie organisations and the survival of our national icons to the public forum. Another important activity of Ausbuy, which is often overlooked, is the management of our trademarks or logos.

Our philosophy is basically to encourage increased consumer demand for local products and services, which will increase capacity, require more employees and support the future of our country. A key to our success in this aim is for Australian products and services to be easily identifiable to the consumers who wish to purchase them. No easy feat when multinational companies falsely promote their products as Australian. These companies get around labelling laws by using Australian iconography and spurious claims on their labels. To address this Ausbuy has, for many years, been producing the Ausbuy Guide, a shopping guide that allows consumers to easily reference a list of Australian owned products and services. Originally, purely a supermarket shopping guide, Ausbuy are hoping to develop this in to a more comprehensive listing of all Australian companies.

Another very important tool in identifying Aussie brands is the Ausbuy logo. Ausbuy would like to encourage all our corporate members to display the logo on their packaging or promotional material. If everyone gets together to support this trademark it will become easily identifiable and will put an end to the advertising tricks foreign companies play.

We also need consumers to target the logo, encouraging corporate members to use it and creating a trustworthy image that will allow all Australians to support our country’s industry, and secure our nation’s future. It is the only regulated logo that definitively confirms Australian ownership.

Friends of Ausbuy are encouraged to look out for the logo when shopping, and to encourage friends and family to do the same. It is your support of the logo that will strengthen its meaning.

Corporate members are entitled to use our logo on their packaging and promotional material; you will be in good company as many of our most high profile members display the logo loudly and proudly. To get a copy of the logos please contact the Ausbuy office.

ACTION STATIONS

Action you can take to help

To comment on this please write to our Trade Minister: W.Truss.MP@aph.gov.au or Tel: (02) 6277-7420.

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