Exports plummet in post FTA trade

Government figures show Australian exports to the US have fallen since the US Free Trade Agreement (FTA) came into force a year ago. In the 12 months to October last year, Australian exports to the United States fell by 4.7 per cent while US imports rose by 5.7 per cent.

Dr Patricia Ranald from the Public Interest Advocacy Centre says it has been a bad deal. 'We expected there to be poor terms of trade, but we didn't expect them to be as dramatic as this in the first year,' she said. She says the deal will not get any better if the Government bows to pressure from US drug companies.

The Federal Government has said it is considering removing a Labor amendment to the FTA, which was aimed at protecting access to cheaper generic drugs. 'We're not even getting economic benefits from this agreement,' said Dr Ranald. 'And yet we've traded off the rights to determine our medicines policies and other social policies in return for a trade agreement which is very lop-sided, where the benefits are going mostly to the US and not to Australia.'

The Government says it is not troubled by the trade figures. The Acting Prime Minister Mark Vaile helped negotiate the trade agreement with the US and is still a big supporter. 'There's been a 60 per cent increase in the number of companies and deals being done between Australian companies in the US as a result,' he said. Trade figures tell a different story. Mr Vaile's spokesman says the Government has always maintained it would take at least five years to assess the success of the agreement and it is too soon to judge.

But Dr Ranald disagrees. 'Well the US has got far more access to our markets under the agreement than we have to theirs,' she said. Dr Ranald says the Government should consider using the clause that allows either government to give six months notice of withdrawing from the FTA if it is pressured to make further concessions on drugs.