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THE COUNTRYMAN

NEWS

 

Selwyn Johnston

INDEPENDENT COMMUNITY REPRESENTATIVES'

ADVOCATE

(Cairns... Far North Queensland)

 

Thank you for visiting my on-line office. 

I appreciate your interest in the issues that effect not only Queenslanders, but all Australians. 

Please let me hear from you about your views on the issues that matter to your Family, your Community and your State.  

Sincerely,

Selwyn Johnston

 

One person, with the support of the community, can make a difference

 

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FREE TRADE

The Truth and The Myths

INDEX

    Australia's Free Trade Agreements

Free Trade vs. Equity of Trade

Full Text of US/Australia FTA

US/Australia FTA - Economic Incompetence

 

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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: 

No one was taken advantage of;

Australia received the imported goods;

The foreign entity received a like amount of Australian goods or services;

The trade books are balanced;

All monies earned interest every step of the way 

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.'

 

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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. 

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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.


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