Magazine of Socialist Action in Australia

SP statement on Bush visit to Australia

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Bush and Howard talk in Canberra: The implications for the working class of a Free Trade Agreement.

Publicly it’s all back-slapping over their phyric victory in Iraq and solemn statements of opposition to terrorism, but the real agenda for the Bush-Howard meeting revolves around a Free Trade Agreement (FTA) between the US and Australia. Howard and his wing of the ruling class have positioned Australia as the US sheriff in East Asia and himself as the region’s Tony Blair.

As the Financial Review casually explained on Saturday: “The global demands on Washington’s attention are so insistent, that it appears difficult for it to deploy optimal resources in Asia or even to find the time to pay attention to its own analysts on events there – as became apparent over East Timor. That’s where Australia helps out.”

Howard sees a FTA as adding “an economic core to the defence core” of the relationship between the two countries, as a Monash Uni report for the Department of Foreign Affairs recently explained. As an aside, this “defence core” is very profitable….for the US. Last week Defence Minister Robert Hill announced that the Government will invest up to US$150 million into developing the Joint Strike Fighter with the US, money that will go straight into the coffers of US arms manufacturers.

This political decision is, according to other sections of the ruling class, risking too much economically. Australia’s economic ties are increasingly with East Asia and China – not the US. 19% of Australian exports go to Japan, 10% to China, and only 9% to the US. Those sections of the Australian bosses who rely on Asian trade or are vulnerable to US rivals, fear a FTA will cut them out of East Asia by being seen as too close to US and/or make them more vulnerable to US imports. The Australian Editor-in-Chief fretted last week that, under Howard, Australia is “in the region but not of it”. The comments of retiring Malaysian Prime Minister Mahathir Mohamad that “Australia is a transplant from another region” strike fear into the hearts of local bosses exporting to East Asia.

Ominously for these sections of the elite, the ASEAN countries moved last week towards setting up an economic community by 2020 with hints that China, Japan and Korea would be involved – but explicity excluding Australia and New Zealand.

The FTA is a dubious payback for Canberra for its support for the US invasion of Iraq. Howard hopes to nail it down before Xmas and see it pass through the US Congress and Senate before next years US Presidential election.

With the the collapse of the World Trade Organisation meeting in Cancun last month (as under-developed countries finally rebelled against the hypocritical demands on agriculture of the rich countries and their insistance that investment and competition rules for capitalists were more important than topics that might curb starvation) FTAs and regional blocks are all the rage rather than the multilateral trade agreements of the past few years. The US knows this and Bush will feel he can push a hard bargain with Howard. The Financial Review predicts “strong arm tactics” by Bush and his team.

The US is demanding abolition of export marketing boards for grains, sugar and rice. It wants the elimination of quarantine and health standard regulations used to restrict US farm imports and the abolition of labelling rules for GM foods.

It also wants stronger enforcement of US patents and copyright, a complete deregulation of telecommunications and financial services, the privatisation of those enterprises still in state hands, and an end to foreign investment controls.

The US also wants an end of quotas on Australian TV, drama and advertisements.
Most worringly for working class people, Bush will demand an end to the Pharmacutical Benefits Scheme (that subsidies locally produced drugs). US drug companies see the PBS as a threat to their profits. If PBS goes, the cost of your script would increase tremendously.
No wonder Howard tried to suppress the findings of an ACIL Consulting report which predicted that a FTA would see Australian Gross Domestic Product drop by 0.2%.

The remnants of the ALP and trade union soft left, such as AMWU National Secretary Doug Cameron, oppose a FTA as we do. However his alternative is a return to multilateral trade agreements. But the WTO has dominated international economic relations in the past period and the legacy has been 1.2 billion people living on less that US$1 a day, according to the US Human Development Report 2003. Reform of the WTO or other international agencies, which are ultimately instruments of the US and the other major powers, will not fundamentally change the direction or the nature of world capitalism. Explosive events – as we see today in Bolivia – pose the need for an alternative to the existing system. The anarchy of the market, the dictatorship of the rich, has be to replaced by democratic economic planning.

International trade, too, has to be planned, as neither free trade nor protection can guarantee economic progress. Natural resources and productive forces should be developed on the basis of international co-operation and planning, with protection of the environment, to eliminate gross inequalities and maximise the benefits to the world’s toiling workers and small farmers. This is the socialist alternative, which requires a social transformation to be carried to be carried out by the working class and its numerous allies amongst the peasantry and the dispossessed.


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