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Wednesday, 23 June 2004
Page: 31307

Mr BAIRD (4:45 PM) —As I said previously, the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004 are great landmark bills going through the House. The free trade agreement is very significant and will certainly provide enormous benefits to the people of Australia: some 40,000 jobs, worth some $58 billion to the Australian economy over 20 years. In 2015, at its peak, it will be worth $6.5 billion a year. This was estimated by the modelling that was carried out by the Centre for International Economics, and certainly highlights the importance of the agreement. Of course, it reflects the good relationship that this government and the people of Australia have with the United States and our long-held traditions together. In fact, the congress has singled out this bill to give it recognition. It is the only free trade agreement likely to be approved before the presidential election.

The United States is a significant market. The United States economy represents 34 per cent of world GDP. With 300 million people, it does present great opportunities. Australia's market there, in terms of two-way trade between Australia and the US, is worth some $41.3 billion. Total investment in Australia is $66.5 billion and Australian investment in the USA is $65.4 billion. So, whichever way we measure it, it is a significant deal, and the government should be congratulated on what they have achieved through this agreement. Certainly it shows the government's commitment to follow this deal through. They successfully negotiated the free trade agreement with Singapore and after that with Thailand, creating more jobs, improving our balance of payments and, of course, creating real opportunities for the future.

Unfortunately, the opposition have been very tardy in their support. We understand that yesterday's series of backflips with the US free trade agreement was part of it. They had previously said all types of terrible things about it, and we heard the member for Rankin going through the issues that he saw as being of concern—the generic drugs issue, for example. He said there were problems in having them approved. I have had official confirmation in the meantime from the Department of Health and Ageing—this is the official advice—that there will be no impediment at all to the approval of generic drugs.

With respect to the comments that we are anti-Australian in our approach, I am not sure on what grounds that is. We had various actors who said they were concerned about the contents rule that relates to Australian television production. That has been preserved. The Australian film industry has been preserved, and the lobbying that I received before from the film industry has certainly ceased as they recognised that their interests are being preserved.

The opposition talked about the exclusion of sugar. Of course, as has been clearly outlined, the government was disappointed by that. But, given all the circumstances, the other areas of the agreement have been excellent. And of course there is the constant mention of Ross Garnaut, as if we cannot remember that Ross Garnaut was economic adviser to the previous Prime Minister.

It was interesting today, also, to hear from the Minister for Trade that, when polled, 60 per cent of the Australian community supported the US free trade agreement, which is contrary to some of the comments made by the member for Rankin, who said that there was a lack of community support. The 40,000 new jobs will be significant in terms of this agreement.

The member for Rankin also talked about the opposition preferring a multilateral approach, and yet the breakdown of the talks in Cancun and the dominance of the G20, who were trying to establish their role in the negotiations, indicated to a number of developed countries that it would be better to negotiate bilateral arrangements. And of course this agreement with the United States provides a framework for future trade agreements, especially as we look to an economic cooperation agreement with the strong economy of China.

So the benefits to Australia will be across a broad spectrum, from agriculture to tourism, from mining to cut flowers and from education to heavy industry. In the agricultural products area, two-thirds of all US agricultural tariffs will be eliminated immediately following the initiation of the agreement: the removal of tariffs on lambs, sheepmeat and a multitude of horticultural products such as mandarins, oranges, tomatoes, cut flowers and nuts. There is also a further nine per cent of agricultural tariffs to be eliminated within four years—a total removal of 75 per cent of all US agricultural tariffs within four years of the agreement's commencement.

In relation to beef, the existing beef quota will be increased by 70,000 tonnes, almost 20 per cent, over 18 years. That also is a significant move forward. It makes us more competitive in relation to imports from Brazil and Argentina and in our competition against Canadian and Mexican products that are already receiving special treatment under the US's free trade agreements with those countries. Increased dairy product quota values represent a first-year increase of 110 per cent over 2003 exports, with future increases above 105 million being expected in following years.

The tuna agreement was great news to the south coast of New South Wales and also in South Australia. The agreement will trigger the immediate removal of a 35 per cent tariff on canned tuna, allowing Australian tuna duty-free access to the $A878 million US market. With respect to processed foods, tariffs on fruit juices and baby foods, for example, will be reduced to zero within four years. Exports of wool and wool products will benefit greatly from the reduction of all tariffs to zero over 11 years, with niche markets of industry importance, such as greasy wool, reduced to that within four years. In the Australian wine industry we currently sell over 1,000 bottles of Australian wine internationally every minute. The sales of Australian wine to the US market are already worth over $1 billion.

With respect to non-agricultural products, from day one more than 97 per cent of US tariff lines on non-agricultural products will be completely dropped, and that goes for the metals and minerals, seafood, automobile, paper and chemical industries. Aluminium industry exports are expected to be worth some $134 million. We will be able to sell the great Australian ute directly to the US. The current 25 per cent tariff on light commercial vehicles will be removed immediately, allowing Holdens and Fords to go straight to the market. We already have over 20 per cent of the market in countries such as the United Arab Emirates and Saudi Arabia, and this is going to be a great plus for us. The automotive industry has recorded sales of over 16.1 million. This market was worth $254 million to Australia producers in 2003.

Other benefits include Australian procurement, and we will see great purchases by the US federal government, worth some $200 billion. We will be allowed to share in that. Access will be provided for Australian companies. We will get enhanced legal protections that guarantee improved market access and non-discriminatory treatment for Australian service providers. We will get mutual recognition of qualifications, allowing the expansion of the export of Australian education programs to the US directly, as well as to other regional nations looking to conduct business within the US. Intellectual property rights will be preserved. Intellectual property rights relating to trade of service are guaranteed under this agreement.

US investment in Australia will provide greater access and ease of investment, providing nearly 30 per cent of total foreign investment in Australia. This is important. In relation to Australian foreign investment, 43 per cent of all Australian foreign investment is in the US as well. Future liberalisation is guaranteed by this. The critical elements of Australian public policy remain intact. Public Service regulation, the Pharmaceutical Benefits Scheme, the right to examine foreign investment schemes, our Export Market Development Grants Scheme, local content for Australian broadcasting, audiovisual services, and single desk arrangements, including those for sugar, rice, wheat and barley, will continue. There will be no weakening of our commitment to multilateral trade.

We believe that this agreement provides us access to the huge market economy of the US, providing some 34 per cent of the world GDP. It is going to provide some 40,000 jobs to Australian companies. Over the life of the contract, it will provide some $48 billion worth of exports and, at its peak, it will provide $6.5 billion a year. This is a very significant agreement and one of which the government should be rightly proud. I commend these outstanding bills to the House. (Time expired)