Australia, US Sign Free Trade Pact

(Washington) In a deal requiring the approval of Congress and the Australian Cabinet, President Bush and Australia's prime minister, John Howard, agreed to eliminate duties from more than 99 percent of American manufacturing exports to Australia and vice versa. U.S. Trade Representative Robert Zoellick and Australian Trade Minister Mark Vaile stated in a news conference that the agreement could boost trade between the two countries by billions of dollars.

Australian farmers have long desired to tap into the large US market and will now be able to, but not completely. According to Peter Corish, President of the National Farmers Federation, the agreement benefits Australian dairy producers, wool, and other agricultural industries, but it specifically excludes sugar, which is a highly protected US market. Although Australian opposition leader Mark Latham remarked that the deal was rushed by Bush and Howard because this is an election year and that it "doesn't appear to be in Australia's national interest," the farming and manufacturing sectors will benefit considerably.

To prevent a flood of beef and dairy products into the US, the agreement calls for lengthy phase-in periods to protect jobs on American farms and ranches. Meanwhile, Australia can anticipate a flood of American manufactured goods, in particular, light commercial vehicles.

Most observers consider the agreement a first step toward continued opening of markets. It's also considered to be a strengthening of economic ties between the US and Australia along with providing some reward to Australia for being a noble ally of the United States in the Iraq War.