Home
* Contact * INDEX *
Current Issues * Priority Issues *
Reference Index * Selwyn's
Profile * Your
Comments
Free
Trade vs. Equity of Trade
While
the Australian Federal Government continues to blindly pursue its autocratic
policy of 'Free Trade', a majority of Australia's primary producers see this
'open-borders' policy as just another nail in their collective coffins.
It
is an historical fact, with all political decisions, that there are 'winners'
and there are 'losers'.
The
'winners' of 'free trade' will be the elitist, globetrotting,
snout-in-the-trough party politicians, who have made an art of sucking up to
un-elected representatives of World entities, including the World Trade
Organisation and the United Nations, plus their multinational conglomerate
mates, who all seem hell-bent on placing Australia in a 'nett food-importer'
position.
The
'losers' are the deregulated, soon-to-be-deregulated, gutted or otherwise
decimated primary producers of Australia.
Australia
has a huge trade imbalance with most trading nations. The imbalance is not in
agriculture, although many food products, both raw and processed, enter
Australia at prices below those of comparable Australian grown foodstuffs.
To
a large degree the imbalance is in manufactured goods. One reason is that many
nations have lower costs of production, based upon a lower standard of living,
cheap labour, inexpensive raw materials and protective government policies.
Multinational
conglomerates, which have repositioned their plants to foreign locations, enjoy
the best of both worlds with inexpensive manufacturing costs and almost
unlimited access to Australia's consumer market.
Our
laissez-faire trade stance, when coupled with many nations' protective trade
stances and the inherent disparity of living standards around the world, is
proving to be a recipe for ever-increasing trade deficits.
'EQUITY
OF TRADE'
is the alternative to 'free trade'.
Under
'Equity of Trade', if a nation, or other trading
entity, wants to export some manufactured item or food product into this
country, and if the item in question is priced lower than a comparable item
manufactured or grown in Australia, then the trading entity is required to pay a
tariff (import duty), at the port of entry, which equals the difference between
the landed-price of the product and the average cost of a comparable Australian
made product.
EXAMPLE:
A shirt made in Sri Lanka lands on Australian shores with a cost of $15, while a
comparable shirt 'Made in Australia' would cost $25. The foreign entity would
then pay a tariff of $10 per shirt.
However,
instead of the Australian government pocketing the tariff income on behalf of
the federal government (which it's not entitled to and which would create
ill-will and do nothing to foster long-range, mutually-beneficial trading
relationships), deposit the collected tariff monies into an interest-bearing
trading account, in an Australian bank, in the exporting nation's name (or
company or any other entity).
Then
give the foreign trading entity 12 months to redeem the trade credit, and
accrued interest, by purchasing any Australian raw material, manufactured good,
or service.
If
the trading entity doesn't redeem the accumulated trade credit within 12 months,
only then does the deposited import tariff (duty) go into Australia's
consolidated revenue, or preferably, an 'Industry Research &
Development Account'.
It's
logical to believe that the foreign trading entity will not leave the tariff
money, and the accrued interest, to go into the Australian Treasury by default.
It will purchase a like amount of goods and services to wipe out the trade
credit account.
When
analysed, the benefits are obvious:
Plus,
the Australian government didn't allow inexpensive foreign goods to displace
Australian goods on price alone. It made the foreign goods compete on a quality
basis with Australian goods, and in addition, allowed Australian consumers to
make the choice of which is better at a comparable price.
If
the imported foreign goods are really superior to the Australian goods, then the
foreign manufacturer will have earned an increased share of the world market,
and the Australian manufacturer, or primary producer, would have to get more
*competitive.
(*
By the implementation of
equal protective government policies as are in place by our trading partners)
The
reverse is also true, so the free market and the law of supply and demand still
gets a chance to work, but it works on the basis of quality and value, not upon
inherent differences in world standards of living.
Is
it logical for Australia to unilaterally adopt 'Equity of
Trade'?
It
is logical if Australians want to continue the nation's constitutional directive
to 'protect' the Australian way of life, and the economy, from any sort of
foreign threat or unfair competition. Australia has never shirked its
responsibility to go to war when necessary to 'protect, defend, and preserve'
the Australian way of life for current and future generations.
Therefore,
it is illogical for Australia to stand aside and passively let our standard of
living decline because our economy isn't worth 'protecting, defending, and
preserving' for ourselves and future generations.
Do
Australians really want their grandchildren working in the world's most
'competitive labour market', if those grandchildren have to work and live like a
peasant in an Indonesian factory, or farm with oxen like a farmer in China, to
make that claim?
The
point is this ... anyone can be competitive with his or her labour, if he or she
is willing to sacrifice his or her living standards. What's difficult is to be
competitive while maintaining or improving your standard of living.
If
Australia and other nations are to be competitive in world markets, then isn't
it preferable to be competitive by raising other nations to the Australian
standard of living, rather than us declining to theirs?
That's
what 'Equity of Trade' does... and 'Free Trade'
fails to do.
However,
when it comes to some political decisions made by successive Australian
Governments, the words of Mark Twain must be considered:
'The
World is run by very intelligent people who are having us on, or
by imbeciles who mean what they say.'
Back to:
Page Index
Home
* Contact * INDEX *
Current Issues * Priority Issues *
Reference Index * Selwyn's
Profile * Your
Comments
US/Australia
FTA - Economic Incompetence
The abject failure of the Howard
Government to fully support Australia's primary producers, by the now signed US/Australia Free Trade Agreement, demonstrates unmitigated
contempt for the 'man on the land', his struggling family plus regional and
rural communities.
Prime Minister Howard and his
Nationals Trade Minister, Mark Vaile, both gave unequivocal assurances to the
sugar industry that there would be no FTA without sugar, which now appears to be
at best misleading or at worst blatant deception.
The touted 'benefits' to Australia is
by massive increases in imported 'cheap' US cars and other 'cheap' US
manufactured consumer goods.
But what about the recent four
thousand (4,000) millions of Australian taxpayer dollars given as subsidies to
Japanese car manufacturers to allow 'cheap' car exports from Australia!
Could the systematic obliteration of
Australia's textile, footwear, white goods and other manufacturing industries
have been the precursor to the systematic obliteration of Australia's primary
producers!
The federal government's
internationalist policy of '… let the market set the price', is economic
incompetence and has the real potential of creating Australian levels of
unemployment indicative of third-world countries.
Commonsense must prevail with the
total rejection by the Australian people of further such FTA's.
Back to:
Page Index
Home
* Contact * INDEX *
Current Issues * Priority Issues *
Reference Index * Selwyn's
Profile * Your
Comments
.
Full
Text of US/Australia FTA
On Thursday March 4, 2004, the
Federal Government finally released the full text of the Australia-US
Free Trade Agreement. You can read it online by clicking onto this
LINK.
The
full
text confirmed the fears of many groups that the agreement will damage
important elements of Australian society like the Pharmaceutical Benefits Scheme
and local content rules in Australian media, and will change intellectual
property laws to favour US corporations at the expense of Australian researchers
and public service providers.
Two
Parliamentary committees, the Joint Standing Committee on Treaties, and a Senate
Select Committee have now considered the agreement. The government has
commissioned economic modelling of the agreement, and the Senate committee will
also commission its own independent modelling.
Negotiations
on the AUSFTA were finalised in February 2004 after 11 months of negotiations.
The final text of the AUSFTA was signed in Washington DC on 18 May 2004.
Both
Australia and the United States have since passed enabling legislation giving
effect to their respective commitments under the Agreement. On 17 November
2004 our governments exchanged notes in Washington DC accepting each other's
implementation processes for the Agreement.
The
Australia-United States Free Trade Agreement (AUSFTA) entered into force on 1 January 2005.
RETURN TO: INDEPENDENT
VIEW
