PUBLISHED | APRIL 12, 2011
COMMENTS | NONE
Gillard commits Australia to free trade pathway
Prime Minister Julia Gillard has announced an overhaul of Australia’s trade policy, committing to trade liberalisation in a throwback to the Hawke-Keating era. Commenting on the new policy today, Trade Minister Craig Emerson said: "Sound trade policy and solid economic reform work hand-in-hand. Prime Minister Gillard has committed Australia to free trade as a pathway to more and better jobs and greater prosperity." The 27-page policy document outlines five main principles to reform Australian trade. The first is that foreign policy considerations should not override trade ones, meaning political issues will take a back seat. "History has taught us that the entanglement of trade policy and foreign policy can have tragic consequences," the document says. Labor will also cease to focus on negotiating individual trade deals for political reasons. The document says such "low-quality’ deals "lock in and legitimise" protectionism. Instead, the foundation of trade policy will be the pursuit of comprehensive multilateral free trade agreements. "The government is willing to conclude a trade agreement with any country willing to sign up to a high-quality and comprehensive bilateral or regional trade deal that is consistent with global trading rules." Thirdly, itcommits the government to transparency in free trade negotiations and non-discrimination among countries when negotiating trade deals. Effectively, that means Australia will stop seeking bilateral deals that exclude other trading partners from commensurate benefits. "The Gillard government is not interested in collecting trophies for the national mantelpiece-empty vessels engraved with the words ‘free trade agreement’ that formalise and validate existing trade restrictions." Former Liberal Prime Minister John Howard favoured bilateral trade deals. The new approach will allow existing bilateral trade negotiations to continue, but not where an agreement would undermine future or existing multilateral trade agreements. Australia is currently engaged in bilateral trade negotiations with Korea, Japan, China, Malaysia, Indonesia and the Gulf Cooperation Council. Gillard hopes to launch negotiations for a bilateral trade free trade agreement between India and Australia later this year. Fourthly, the document says Australia will pursue trade reform without waiting for trading partners to reform their own trade policies, including labour and environmental standards. Finally, it says trade policy should be executed seamlessly in line with wider economic reform. The document also raised objections to the way Australia uses its quarantine system, foreshadowing reform in this area. "Quarantine restrictions are legitimate in reducing the risk of imported pests and diseases but should not be used as a surreptitious measure to protect domestic primary industries against competition from imports." Australia’s long-standing ban on the import of New Zealand apples (lifted earlier this year) was raised as an example of quarantine concerns disguising a protectionist agenda. The paper criticised the movement of labour, management and equipment resources to mining territories, warning it left non-mining areas unable to "take up the slack" when the mining boom slowed down. But the document also said the government did not believe the movement of production resources should be impeded by interventionist government policy. "That’s why an economic reform program designed to restart productivity growth as the basis for securing the competitiveness of Australian industries-mining and non-mining-is essential." The policy takes on nearly all of the recommendations made by the Productivity Commission’s 2010 report on trade agreements.