The federal government’s free trade agreements don’t go far enough, according to recently elected Liberal Democratic Party Senator David Leyonhjelm.
In this exclusive interview with Dynamic Export Senator Leyonhjelm told David Gray that free trade is central to the Liberal Democrats philosophy, claiming Australian farmers are among the least protected in the world …
Before entering politics Mr Leyonhjelm ran a consulting business in the agribusiness/agriculture sector.
A longstanding libertarian, his views align with agricultural lobby’s support for free trade and the government’s efforts in support of market access.
At a time when the Australian Government is finding it harder than ever to secure support for the so called free trade policies and agreements Senator Leyonhjelm is one voice in parliament that openly supports “free trade” agreements.
Indeed, the Senator from NSW believes that the Government negotiated free trade agreements don’t go far enough in pursuit of purist free trade positions.
Central to these views is the belief that Australia’s interests would best served by unilateral removal of tariff barriers and other restraints on free trade, aside from reasonable biosecurity measures. Next best, in his view, are multilateral free trade agreements followed by bilateral agreements.
The Senator says free trade is central to the Liberal Democrats philosophy and speaks positively about the reformation of a heavily protected New Zealand (a near 100% agricultural) economy during the 1980s.
Australian farmers are among the least protected in the world. It follows therefore that free international trade for most Australian agricultural products creates a uniquely Australian advantage in this sector.
Low cost imports
Senator Leyonhjelm believes the free trade debate focuses too heavily on Australian exports and not enough on the value of allowing imports. As an example, the Senator cited the availability of low cost bananas from the Philippines during the Australian off season, claiming the Australian banana growers lobby has successfully opposed imports on the basis of overstated concerns about fungal disease.
Australia has an international reputation for employing political devices such as “creative” health or pest related barriers to impede free trade. Low cost imports, in his view, benefit Australian consumers and also contribute to a more robust and competitive domestic production sector.
The Senator believes cheap imports from the poorest nations of the planet raises living standards at both ends, with the exporting country gaining from the trade and the importing country benefiting from the low prices.
He says the free trade agreement with the United States demonstrates how wealth and jobs can notionally be created. Focusing on his own area of expertise, agribusiness, the Senator says this trade agreement created new commercial opportunities for Northern Australian beef cattle farmers selling low grade-low profit hamburger mince which also benefited goods and service providers as well as the meat processing and distribution network.
‘New jobs have undoubtedly been created’
The Senator says that while it can be challenging to quantify benefits when export markets are influenced by factors such as the fluctuating dollar, some new jobs have undoubtedly been created. It was not clear whether any new jobs that may have been created were primarily at the subsistence end of the wage scale or if well paid jobs came as a result of the US trade agreement.
The Senator believes the Australian free trade agreements are an improvement on protectionist policies, but not as desirable as complete free trade across the board.
Whilst citing 18th century economist Adam Smith and the period of “Scottish Enlightenment” along with David Hume et al, Senator Leyonhjelm expressed the strong view that social structure, separation of church and state, private property and an independent judiciary were also key elements in establishing the conditions for a prosperous trading economy.
Regarding Senate cross bench attitudes to free trade, Senator Leyonhjelm spoke with disarming candour, explaining that none of the other Senators shared his enthusiasm for free trade and only Senator Day (SA) was receptive to most of the free trade principles as espoused by Senator Leyonhjelm.
For more on Liberal Democrat trade policies visit: www.ldp.org.au
David Gray is lead consultant at BizTechWrite providing industry research, Export Manufacturing industry white papers, Geopolitical studies and think tank information services. David can be contacted on 0458 701 990 or at firstname.lastname@example.org.