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New government report supports labor concerns with US-Australia trade deal.



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FOR MEDIA

CRAIG EMERSON Member for Rankin

SHADOW MINISTER FOR INNOVATION, INDUSTRY AND TRADE

26 May 2003

NEW GOVERNMENT REPORT SUPPORTS LABOR CONCERNS WITH US-AUSTRALIA TRADE DEAL

A Productivity Commission study supports Labor concerns that a US-Australia trade deal may do more harm than good.

The study concludes that the trade-diverting effects of preferential trade deals have generally outweighed their trade-creating effects.

The US-Australia trade deal would lower trade barriers between the two countries but maintain them for other countries. This could divert Australian exports away from East Asia to the United States.

In its report on a possible trade deal with the US released earlier this year, ACIL Consulting warned that:

“Trade diversion effects, the diversion of government resources away from other trade initiatives, and the disaffection of countries that on the whole are more important trading partners, all threaten the worth to Australia of a special trade agreement with the US” (p.iv).

ACIL concluded that an FTA with the US would leave Australians as a whole worse off.

Last week, Trade Minister Mark Vaile conceded East Asia - and China in particular - was carefully watching the US-Australia trade negotiations.

A real risk is that East Asia could respond to a discriminatory, trade-diverting deal with the US by setting up its own discriminatory trade bloc. Any such bloc would exclude Australia.

Contact: Craig Emerson 0418 781 386