Signed trade deal far from done

By GREG ANSLEY in Canberra


Australia and the United States have formally signed their new free-trade agreement despite continuing opposition on both sides of the Pacific and doubts that the man who may be the next American President will support it.

Canberra is hoping the agreement will be pushed through Congress by early July, getting it out of the way before the US election and allowing it to run according to Prime Minister John Howard's own election timetable.

Unlike Congress, the Australian Parliament cannot reject the agreement but the Senate - controlled by Labor and minor parties - could block parts of it that require legislative and regulatory action.

But the biggest danger appears to lie in Washington, where powerful forces are still arrayed against the pact despite the strength of the defence alliance, Australian support in Iraq and the personal warmth of many influential Congressmen.

New uncertainties have emerged with the refusal of Senator John Kerry, the Democrat presidential candidate, to publicly support the agreement.

Kerry has previously been a strong supporter of free trade, voting for the renewal of the presidential fast-track trade authority that has underwritten the pace of the Australia-US pact, the expansion of US trade to the Third World, the normalisation of trade with China and Vietnam, and free trade with the Andean nations.

But, courting powerful unions, he has more recently promised to veto the proposed Central America Free Trade Agreement and the Free Trade Area of the Americas until stronger labour and environmental standards are written into them.

Significantly, he is also committed to an immediate 120-day review of all existing trade agreements to ensure labour and environmental standards are being met, and will not sign any new pacts until the review is completed.

A key thrust of Kerry's campaign has been the loss of 2.8 million manufacturing jobs under the Bush Administration, falling exports, and a record US$490 billion ($805 billion) trade deficit last year.

Kerry has also sought the endorsement of the huge Teamsters Union, which has vigorously attacked the Australia-US pact.

Although the fate of the agreement could be decided before Kerry wins the White House - if he beats President George W. Bush - any opposition to it in the campaign could sway Democrat members of Congress.

Alternatively, it could be pushed aside until after the election.

Australian Trade Minister Mark Vaile spent two days lobbying Congress, including the Senate Finance Committee and the House Ways and Means Committee, before signing the agreement yesterday with US Trade Representative Robert Zoellick.

Howard will also push for its passage through Congress when he visits Washington next month.

After the signing ceremony Vaile expressed confidence that the pact would win congressional approval, saying the agreement was balanced politically and economically.

"There are many more Democratic votes lining up behind the Australia-US FTA than was first expected by the Americans," he told Channel Nine.

Vaile also drew on the strength of the defence alliance.

"One thing that both sides have agreed on in terms of our objectives in pursuing this outcome is that this agreement elevates the economic relationship to the same status as our strategic relationship," he said.

But while Labor has yet to commit itself to blocking parts of the pact in the Senate, the agreement faces significant political opposition at home and in public opinion polls.

An inquiry into the deal by Parliament's joint standing committee has shown the depth of concern, with half of the more than 200 submissions opposing the pact and a further third expressing serious reservations.

Powerful support is coming from key sectors such as business, industry and - more reluctantly - farming, but the opposition is broad-based and lodged in many areas the major parties want to win over. Opponents ranged from individuals to unions and groups representing nurses, pensioners and poultry producers.