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Wednesday, 29 April 1987
Page: 2033

(Question No. 1634)

Senator Macklin asked the Minister representing the Minister for Trade, upon notice, on 20 February 1987:

(1) Is the Government aware of the proposed content of the proposed Omnibus Trade Bill likely to be passed by the United States Congress later this year; if so, can the Minister provide details of the various proposals being advanced by Congress and can he also identify those elements which he believes have the potential to affect Australia's trading interests.

(2) Can the Government identify those commodities or goods which would be affected by the above Congressional proposals and the extent to which exporters would financially suffer if the above proposals were implemented.

Senator Button —The Minister for Trade has provided the following answer to the honourable senator's question:

(1) The Leadership of both the United States House of Representatives and Senate have initiated omnibus trade bills, as has the Administration. These bills include matters beyond trade and address the question of the competitiveness of United States industry. Their trade provisions are described as being of a `generic character', that is they are designed, in the main, to amend current United States trade law, legal practice and administrative procedures, change definitions and tariff classifications, but generally avoid inclusion of measures to change the terms of access or export for specific products. A number of other bills, of a generic character, have also been introduced.

In addition to these there are other bills either tabled or foreshadowed which are product specific. Areas to come within the ambit of such actual or foreshadowed bills include textiles, telecommunications, coal, lamb and uranium.

The House Ways and Means Committee is presently developing its version of a trade bill, taking as its starting point an amended version of the trade bill passed by the House of Representatives in 1986 (HR4800, now HR3). Various other House Committees are simultaneously involved in trade hearings. The Senate Committees will have their own trade hearings after the Bill passes through the House of Representatives, probably in May.

Specific concerns with the House bill relate to provisions designed to expedite import measures on `perishable' products, certain references to United States coal trade with Japan, casein, duty drawback on United States sugar imports, and the possible auctioning of quotas. We have also made clear our continuing opposition to any expansion of United States export subsidies on agriculture. There are other matters of a generic character.

One of the common elements is the provision of a negotiating mandate for the United States' President for the Uruguay Round of Multilateral Trade Negotiations. These negotiations are likely to be the single most important determinant of the future world trading system and we welcome the active participation of the United States.

Some of the provisions in the proposed Trade Bills would make the attainment of a major objective of the negotiations, namely the establishment of an open multilateral trading system with strengthened and fairer trading disciplines, difficult, if not impossible, to achieve. For example, provisions which require discriminatory protectionist action against countries with `unwarranted trade surpluses' with the United States, would represent a major and unprecedented departure from the basic principles of the GATT. In more recent drafts of the House version of the bill there have been significant changes to these provisions.

In addition to the omnibus trade bills, there is an on-going debate in both the House of Representatives and the Senate on farm policy, particularly farm income, exports and United States competitiveness. A number of bills have been introduced proposing mandatory supply controls, expansion of the Export Enhancement Program and a `marketing loan' for wheat. In order to reduce the budgetary costs of farm support programs, the Administration has, inter alia, proposed a 10% reduction in the target price for all commodities in Fiscal Year 1988.

(2) These Bills provide for increased protectionism for United States industry. Consequently they could present a serious threat to several categories of Australian exports both in terms of reduced access to the United States market and in terms of unfair competition from subsidised United States products on other markets. There is also the risk that Australia's raw material and food exports to third world countries could be adversely affected by the trade pressure being applied by the United States on countries such as Japan and the Republic of Korea. A clearer picture of specific Australian commodities at risk should emerge over the coming months as the various Committees of Congress examine United States trade legislation in detail.

Every effort is being made by the Australian Government to protect Australia's trading interests in the United States and to ensure that our concerns are fully understood by opinion makers in the United States. During my visit to Washington in February I had meetings with key Administration and Congressional figures. In late March I had a further opportunity to press Australia's case with Mr Clayton Yeutter, the United States Trade Representative, at a meeting of Trade Ministers at Taupo in New Zealand. In addition, our Embassy in Washington and our Consul-Generals in the United States have been very active in presenting Australia's case. We have also been active with the United States Embassy in Canberra.