Australia-United States Free Trade Agreement

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The Australia-United States Free Trade Agreement (AUSFTA) is a preferential trade agreement between Australia and the United States modelled on the North American Free Trade Agreement (NAFTA). The FTA was signed on 18 May 2004, ratified by the U.S. House of Representatives on 14 July 2004 by a vote of 270-156 and by the U.S. Senate on July 15, 2004 by a vote of 80-16. [1] President George W. Bush signed the United States-Australia Free Trade Agreement Implementation Act into law on 3 August 2004. [2] The FTA came into force on 1 January 2005.

Contents 1 History of the FTA 2 Provisions of the FTA 2.1 Establishment of the free trade area and definitions 2.2 National treatment and market access for goods 2.3 Agriculture 2.4 Textiles and apparel 2.5 Rules of origin 2.6 Customs administration 2.7 Sanitary and phytosanitary measures 2.8 Technical barriers to trade 2.9 Safeguards 2.10 Cross-border trade in services 2.11 Investment 2.12 Telecommunications 2.13 Financial services 2.14 Competition-related matters 2.15 Government procurement 2.16 Electronic commerce 2.17 Intellectual property rights 2.18 Labour 2.19 Environment 2.20 Transparency 2.21 Institutional arrangements and dispute settlement 2.22 General provisions and exceptions 2.23 Final provisions 2.24 Amendments 2.24.1 Pharmaceutical Benefits Scheme 3 US attitudes to the FTA 4 Australian attitudes to the FTA-support 4.1 Economic benefits 4.2 Dynamism and economic integration 5 Australian attitudes to the FTA - opposition 5.1 Trade diversion 5.2 Intellectual property 5.3 Local content provisions 5.4 Manufacturing and agricultural sector 5.5 Pharmaceutical Benefits Scheme 5.6 Ratification of the FTA 6 Outcomes 7 References 8 See also 9 External links 9.1 Governmental links 9.2 Media 9.3 Pro-FTA links 9.4 Anti-FTA links

[edit] History of the FTA

The U.S. first proposed a free trade agreement with Australia as far back as 1946. In more recent times, the prospect of a Australia-U.S. FTA was raised in the 1980s by the Hawke Government, and in 1992 U.S. president George H. W. Bush offered to begin FTA negotiations with Australia, but was turned down by Australian Labor Party Prime Minister Paul Keating [3].

It was not until early 2001, after the election of George W. Bush in the U.S. and with John Howard in power in Australia, that a Australia-U.S. FTA finally began to take shape. In April 2001, President Bush signalled his interest in pursuing an FTA with Australia provided “everything is on the table”. Following this, in 2004, the Department of Foreign Affairs and Trade commissioned a private consultancy – the Centre for International Economics (CIE) – to model the economic impacts of such an agreement. Negotiations for the FTA began in April 2003 and after five rounds of negotiations held in Canberra, Hawaii and Washington, D.C., the text was finally agreed to in February 2004, and signed off on by Australian Trade Minister Mark Vaile and U.S. Trade Representative Robert Zoellick in Washington in May 2004.

The FTA was ratified by the United States Congress with the passage of the United States-Australia Free Trade Agreement Implementation Act on 3 August 2004. In Australia, the agreement's implementing legislation was reluctantly passed, with amendments, by the Senate on 13 August 2004. After some delay, the U.S. Administration accepted the amended Australian legislation as being consistent with implementation of the agreement.

[edit] Provisions of the FTA

The text of the Free Trade Agreement is divided into twenty-three sections, listed and summarized as follows:

[edit] Establishment of the free trade area and definitions

This chapter lays the framework for the FTA. It states that the provisions are consistent with the relevant sections of the General Agreement on Tariffs and Trade (GATT) 1994 and the General Agreement on Trade in Services (GATS). Both GATT and GATS are documents created by World Trade Organization (WTO) agreements and they lay the boundaries for subsequent bilateral agreements such as the Australia-U.S. FTA.

The chapter also sets definitions to be used throughout the agreement in order to assure uniformity.hhg

[edit] National treatment and market access for goods

Chapter three of the FTA lays out conditions for what types of goods are subject to non-discriminatory treatment. Certain types of goods are fully applicable to the agreement immediately and some are phased in over a period of years or temporarily applicable.

The chapter also reminds the two countries that they must abide by the WTO rules applying what is called national treatment. "National treatment" means that each country will provide the same treatment to imported goods from the other country as if they were domestically produced goods.

Finally, the chapter established a Committee on Trade in Goods with the purpose of providing arbitration for each country to "raise issues of concern in relation to tariffs, non-tariff measures, rules of origin and customs administration."

[edit] Agriculture

The agriculture section of the agreement outlines the system for eliminating most tariffs for agriculture products being traded between the two countries. It also agrees to eliminate export subsidies when the good in question is being exported to one of the two party countries.

Special tariff rate quotas are part of the agreement. These quotas allow Australian producers to export increasing amounts of these products free of duty to the United States during the tariff elimination period. The following agricultural products are designated:

• Beef
• Dairy
• Tobacco
• Cotton
• Peanuts
• Avocados

The quota systems vary for the different products and are outlined, in detail, in this section.

The section also sets up a Committee on Agriculture with the purpose of providing "a formal opportunity for Australia and the United States to discuss a wide range of agricultural issues relevant to the Agreement, including trade promotion activities; barriers to trade; and consultation on the range of export competition issues."

Finally, the two countries have committed to working with the WTO on a multilateral scale to eliminate export subsidies to other WTO member countries.

[edit] Textiles and apparel

Chapter four deals with the trade of textiles and apparel between the two party countries. The bulk of this section outlines the ru