FTA with USA: Major opportunity for Australian business
Tuesday, 10 February 2004
Mr Andrew Stoler, Executive Director of the University of Adelaide's Institute for International Business, Economics and Law, has hailed the Australia-USA Free Trade Agreement as a major opportunity for Australian business.
Speaking at CEDA-sponsored conferences in Adelaide and Melbourne on 9- 10 February, Mr Stoler, a former Deputy Director-General of the WTO, pointed out that as from January, the overwhelming proportion of Australian exports would enter US markets duty free, Australians would be able to access an American Government procurement market worth US$ 270 billion, and most Australian services providers would receive national treatment in the USA.
While indicating that Australia as a whole would benefit importantly from the new opportunities, Mr Stoler emphasized that the agreement contained a number of provisions of particular interest and benefit to South Australia.
"On day one of this agreement, $310 million in auto parts exports and $140 million in seafood exports will get duty-free treatment in the USA. Also eligible for immediate duty-free treatment are wheat and cereal flour mixes and horticultural products, like oranges, mandarins, mangoes, tomatoes and strawberries.
"The 35 percent American duty on canned tuna and the 25% duty on Australian-made 'Utes' will disappear overnight," Mr Stoler said, adding all these openings will be of immediate benefit to South Australia.
Mr Stoler downplayed the significance of the American refusal to open the sugar market or provide early total liberalisation for beef and dairy products.
"Quite frankly, we have to recognize that the Queensland sugar industry is not competitive globally and the benefit of access to the US market would last only until such time as Brazil - a far more efficient producer - gained access to that market.
"American limits on Australian beef have never in practice actually restrained the trade and dairy producers will see some important gains under the FTA notwithstanding the phased-in approach to liberalisation. At the same time, a phased reduction of Australia's motor vehicle tariffs will cushion the liberalisation shock to the local automotive industry."
While recognizing that no trade agreement, including this one, is perfect, Mr Stoler opined that the result is nevertheless impressive given the political need of both Canberra and Washington to tread lightly in sensitive areas.
Note: On 25 February, the Institute will be sponsoring a major international symposium on the intersection of WTO law and economics. Visit www.iibel.adelaide.edu.au for details.
Executive Director, Institute for International Trade
The University of Adelaide
Business: +61 8 8313 6944
Mobile: 0412 586 063
The University of Adelaide
Business: +61 8 8313 0814