Dangers of US "free trade"

Kenneth Davidson: The Age Mon 22 Mar 2010

Why is the Rudd government entering into new free trade negotiations with the Obama administration?

Australia has nothing to gain except a further erosion of our sovereignty and Barack Obama lacks authority from Congress to undertake a binding agreement.

The US wants to open up the rest of the world to US investors on a privileged basis, sanctioned by binding international agreements, and backed up by domestic laws (including criminal laws to protect intellectual property rights). In this, Obama is carrying on the trade policies of previous administrations.

One way or another, the US has been trying to shape the world along the lines of the North American Free Trade Agreement between Canada, the US andMexico, even though this agreement is electoral poison in all three countries.

Obama was elected on a promise to abandon the Bush administration’s free trade strategy and even roll back some of the more obnoxious provisions in the North American template for the rest of the world.

The central aim of the strategy (insofar as Wall Street and ‘‘big pharma’’ is concerned) —to get China, Japan and ASEAN countries to come on board in North American-style free trade agreements—seems likely to fail. In all these countries, government plays a strategic role in economic development, and while exportled growth has been a hallmark of the Asian economic miracle, opening up their domestic economies has been very much on their terms. These countries haven’t forgotten that the ones that did best during the Asian financial crisis in 1997 were the ones that resisted pressure from the US and the International Monetary Fund to open up their financial markets.

It is only six years since the free trade agreement with the US was made. Where is the evidence that it has made Australia better off? There is none.