US and Australia Consent to FTA

The United States and Australia, on February 8, have consented to the Free Trade Agreement (FTA) which focuses on lowering customs requirements as to the manufacturing industry field.

The U.S. president, George W. Bush, and the Australian premier, John Howard have come to terms with a point of contention as to the FTA that was not accomplished even in the final negotiation, which was continued for two weeks by the delegations from each country, disclosed the US Trade Representative (USTR). This agreement will come into effect only after being ratified by the U.S. and Australian congress.

The Australian side has recognized the US’s protective measures toward its sugar market and admitted their level of quarter and customs. But, in compensation for this protection, the US side has permitted Australia to support subsidies toward its pharmaceutical industry field.

The two countries have also agreed to abolish the customs as to the agricultural products such as beef and dairy products, over the next 18 years step by step.

Due to the FTA settlement, 99 percent of the products imported from the US to Australia and 97 percent of the Australian products imported to US will face no customs requirements. The scale of trade between two countries in 2002 was $28 billion,

As for the agreement, “Among the diverse accomplishments resulting from the FTA settlement so far, the most important is the direct reduction of customs,” assessed the chief of USTR, adding, “The manufacturing industry will make a great net profit.”

On the other hand, in Australia, the sugar cultivators and the opposite parties have complained about the exception of their sugar products, one of the major exportation products, on the FTA list, saying, “It is the ‘discriminated trade agreement’ rather than the ‘free’.”

Kwan-Hee Hong konihong@donga.com