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Wednesday, 4 August 2004
Page: 25571


Senator HARRIS (10:24 AM) —I rise in this debate on the US Free Trade Agreement Implementation Bill 2004 and the US Free Trade Agreement Implementation (Customs Tariff) Bill 2004 to place on the record One Nation's concerns about and opposition to the US free trade agreement. One Nation is opposed to the free trade agreement—opposed to its philosophy, opposed to the process and opposed to the policy of free trade. Let me state very clearly at the outset that our opposition does not mean that we are anti-American or un-Australian. Rather, our opposition is based upon the fact that, through this agreement, Australia loses its economic sovereignty, the right to protect our own, the freedom to grow our own industries, the right to foster our own culture and the ability to help Australians first.

The FTA severely restricts and confines the role of our democratic government. In many cases, the final say is given to dispute resolution bodies—a panel of three people—not to our elected decision makers in this parliament. The final say is out of our control. The bills before us today are only a tiny part of the free trade agreement implementation and deal mainly with copyright and patent laws. After the election, when everybody has forgotten about the FTA, we will get the rest of the legislation. When the song and dance is over, it can be argued that we have a precedent for supporting the FTA. We will hear the voices chiming, `We can't stop it now because we've started it.'

Let me touch very briefly on NAFTA—the North American Free Trade Agreement between the US, Canada and Mexico. Key sections of the US-Australia FTA are exact word for word copies—plagiarised, if you like—from NAFTA. Under the US-Australia FTA, our people will be competing in the US with Canadians and Mexicans and everyone else that the US has a free trade deal with. NAFTA has been a huge success for large business but for the little blokes—the family farmer, the small manufacturer and the industries that cannot compete—it has been nothing more than a seven-year economic war. Have a look at the US Department of Labor NAFTA transitional adjustment assistance cases. The facts are on its web site in black and white. In thousands and thousands of cases across the United States and across many industries, the Department of Labor concludes that there has been a shift in production to Mexico or Canada. The effects are so bad that the US labor department even maintains a web page titled `Mass Layoff Statistics'.

I have here a list of companies certified by the US Department of Labor as NAFTA casualties, where workers have lost their jobs. This document is from the US government's own web site. It is ironic that the web site's address is www.doleta.gov. How appropriate, because all of the people listed there are now on the US dole queues! It is not a small document; it is 30 pages of companies which have shifted or shifted their work force to either Canada or Mexico. Here are just a few of them: Motorola, shift in production to Canada; Phelps Dodge, imports from Canada/Mexico; Samsonite, shift in production to Mexico; and Bunger Steel, shift in production to Mexico. And so the list goes on—30 pages of clear, identified cases where the North American Free Trade Agreement has moved jobs out of America. Our document, in some cases, takes the wording of NAFTA word for word. Those are only a few examples from Arizona and Florida; there are 30 pages of examples from two states.

The Australian government and the ALP have now endorsed the free trade process, after the NAFTA process has proven to have caused massive job losses in the US itself. Free trade is not the utopia its proponents claim. The history of free trade is not new. There are many historical examples to demonstrate that free trade, particularly in agriculture, does not work. The book Grain Through the Ages, published by the Quaker Oats Company, describes free trade in the Roman empire in the first and second century BC. It reads:

One reason for the decline of grain farming in Italy was the importation of grain into Rome from the rich grain lands of Sicily and Egypt. In Sicily these grain lands had been appropriated by rich men and scheming politicians who farmed them with slave labor. As a result the markets of Rome were flooded with cheap grain. Grain became so cheap that the farmers who still owned small pieces of land could not get enough money for the grain ... to support their families and pay their taxes. They were forced to turn their farms over to rich landowners. On the land of Italy slave gangs working under overseers took the place of the old Roman farmers, the very backbone of the—

Roman empire. It continues:

The farmers, after their land had been lost, went into the city walls, leaving the scythe and the plough. They worked now and then at a small wage. They ate mostly bread made of wheat which was distributed to them by any politician who wanted their votes at an election. They lived in great lodging houses three or four stories high.

The land ... became poor ... The use of slaves meant that the land was badly worked because usually the slaves did as little as they possibly could unless they were under the eye of the overseer.

In the end, the land itself was destroyed by the economic process.

Imports into Australia have just risen for the fourth consecutive month. The latest trade figures show that we are importing more than we are exporting. This is the worst financial year for trade in the 20-year history of the statistical record. The trade deficit is $24 billion, up from $18.6 billion last year. The ratio for export credits this year was minus 17. The only worse year in history was 1986, when it was minus 21, and that was the year that Paul Keating made his reference to a banana republic. Trade has little to do with Australia's supposed robust economy. No member of the government can claim that the economy is doing gang busters due to free trade policies—not when we are importing more than we are exporting. Over the past 15 years, almost one-quarter of Australian family farmers have gone out of business. Official figures from the Australian Bureau of Statistics indicate that the number of farming families in Australia decreased by 22 per cent between 1986 and 2001. If this trend continues, more than half of Australia's family farms will be lost in the next 15 years. With this FTA, the trend of small family farms to closure will only accelerate.

In the US 33,000 farms with annual incomes of less than $100,000 disappeared during the first seven years of NAFTA. This rate is six times higher than that of the pre-NAFTA period. While Canada's NAFTA agricultural exports grew by $6 billion between 1993 and 1999, net farm income declined by $600 million over the same period instead of rising by $1.4 billion, as Agri-Food Canada had predicted. The rate of Canadian farm bankruptcies and delinquent loans in Canada is now five times what it was before NAFTA. Even as Canadian agricultural exports doubled, dropping prices meant that Canadian farms' net incomes declined by 19 per cent between 1989 and 1999—that is, Canadian exports doubled but the income to the average farm dropped by 19 per cent.

On the Atherton Tableland in Far North Queensland, we have witnessed first-hand the destructive forces of free trade. Tobacco, sugar, dairy, prawn trawling, bananas, apples and pork are either going to the wall or under threat. Under this agreement, all US agricultural imports into Australia—many of them grown on corporate farms that are heavily subsidised by the US—will gain immediate, duty-free access to Australia. The US can automatically access our dairy and beef markets, but there is an 18-year gradual phasing in for us to access theirs. I put it to you that over the 18-year phase-in period our dairy and beef will be virtually annihilated. Dairy and beef farmers will not need to access the US because there will be none of them left.

It is likely that only a few large agribusiness companies will control the market between Australia and the US, with a few niche markets thrown in. Due to the likelihood of large agribusiness making large donations to political parties, it is not beyond the realms of possibility that we will see farm subsidies come into Australia, as they did into America. Our own local producers will be competing with increased imports of beef, dairy products, almonds, tomatoes, cherries, olives, grapes, corn, frozen strawberries and walnuts, just to name a few. Our cheese market, which is currently quite well protected via tariffs, will be opened up to US competitors. Other products, such as potatoes and raisins, will have their five per cent tariff removed.

This morning my office received petitions from nearly 1,000 workers in the manufacturing industries. They are pleading with us to stop this agreement. Under the FTA, more than 99 per cent of US manufactured exports to Australia will become duty-free immediately upon the agreement entering into force. The US manufacturers estimate that the elimination of tariffs could result in $US2 billion per year in increased US exports of manufactured goods to Australia. The FTA makes it extremely difficult, if not impossible, to implement the kinds of national economic and industrial development policies that are necessary to build up a strong national economic base.

One Nation is well aware of, and shares the concerns expressed by, the Australian Manufacturing Workers Union. They say that `our 15 per cent tariff will go down to zero when the free trade agreement takes effect, and this is likely to produce huge job losses in our industry as American auto parts will flood the Australian market'. With the stroke of a pen, we are going to destroy what is left of our manufacturing industries. If you have any doubt about this, look at the American Department of Labor's statistics I gave you earlier. Sadly, we are playing one sector in the Australian economy off against another.

For small benefits to some sectors like the service industries, including government procurement, we agree to wipe out our manufacturing industry. At present the US has access to Australian government procurements, but Australia does not have access to the US market. That is because we did not sign up to it under the WTO in that section of GATS, which is on a reciprocal basis. The reason is that Australia was striving for most favoured nation status. In other words, under GATS we gave the US access to all of our government procurements and in return we got nothing. Finally, we get access to US government procurements, but at a great cost to other sectors of our economy.

One of the many problems with the FTA is the investment chapter which prohibits any imposition of terms and conditions on foreign investors. It requires our federal, state and local governments to treat domestic and foreign owned corporations on an equal basis, and to grant US companies most favoured nation status. We will now have to favour US multinationals as much as our own Australian companies at all levels of government procurements.

I note Senator Hill's response yesterday to my question on the Pharmaceutical Benefits Scheme. I want to point out something in the US Trade Representative's letter of exchange to Minister Vaile. Yesterday I used Minister Vaile's letter to Mr Zoellick; today I have Mr Zoellick's letter to Minister Vaile. In Minister Vaile's letter, Australia agreed to provide opportunities to apply for an adjustment to the price of a pharmaceutical under our PBS. It would then be logical to expect that in Mr Zoellick's letter back to Australia there would be an equal commitment by America to allow Australia to apply for an adjustment in America—wrong. Mr Zoellick's letter to Mr Vaile under section 4 carries the same commitment, so in our commitment to America, Australia says, `Yes, the Americans can apply for a price adjustment in Australia,' yet in America's commitments to Australia we find, again, the same wording—that we will agree to give them the opportunity for a price increase. How ridiculous! There is not even a reciprocal commitment from the Americans. The US can apply for adjustments in the prices of our prescription drugs, and that is it—cut and dried—it is in the agreement.

Last year a Senate committee released a report on the FTA, and I want to put on the record that senators on the committee at that time did not even have access to the FTA. The senators in the chamber today will remember the debacle going backwards and forwards about the agreement being legally scrubbed. One Nation has significant concerns about the committee that operates within the parameters of this treaty. The problems with the PBS committees are well documented—most recently on the ABC's Four Corners.

Multinational companies and peak business bodies in Australia wanted the free trade agreement and lobbied for it. I have a document here from the Australia-United States Free Trade Agreement Business Group setting out the groups that have lobbied for it. It is most disconcerting that we actually find American firms in America lobbying the American government and those same firms, who own companies here in Australia, lobbying the Australian government. There is overlap between the companies lobbying for the FTA and political donations past and present. A search of corporate donations on the AEC's web site shows very clearly that there is a linkage between the companies that make donations to political parties in Australia and the companies that are lobbying for this agreement. They are one and the same companies or part of the same companies.

We wonder why there has been little negative comment about the FTA from the commercial media. You have to wonder when you have got News Corporation lobbying for the FTA at both ends. The government has recently changed its vocabulary in relation to the FTA, and now answers by ministers and departments are prefaced with the phrase `to the best of my knowledge'. (Time expired)