HOW FETTERED THE FREE TRADER?
Half of Ozplogistan is chattering about the 'Free' 'Trade' 'Agreement', so I guess I should, too. It won't take me long because we don't know what the real document's 500 pages actually hold, and to speak in detail of a deal whose details are denied us would be silly.
So please allow me to shed some general darkness on proceedings. This I will do by way of itemising the sort of suspicions that assail the blogorrhoeaic mind:
a) I believe this is what Australia's complicity in the invasion of Iraq was actually all about. That's what I take Howard to be saying when he calls this deal a once-in-a-generation opportunity (for only once per generation have we had the chance dutifully to join Uncle Sam in one of His excellent adventures). As with any person who gives himself so completely to the pursuit of power as actually to attain it, Howard has always been muchly concerned with his place in history, and he has always left pride of place in the trophy room for a trade deal with the world's biggest economy. This Washington knew in 2001, hasn't forgotten, and continues to exploit.
b) An accomplished student of power like Howard must always have known what could and couldn't be done. He is as aware as Shrubya himself as to what the administration owes to whom, especially in an election year. He is also aware, as Washington is, that the agreement can only be promulgated after the Queensland election, that he desperately needs to wrest the front pages off Latham as parliament reconvenes, that the agreement should be promulgated as long before the cockies go the federal polls as possible, and in plenty of time to get the thing ratified before any possible change of government. Yesterday, in other words. Whatever were the terms of the agreement as at the weekend, those would be the ones Howard would accept if he was to have his place in history.
c) If I know anything about the role of small print in the wielding of big power, the pharmaceutical benefits scheme has been mortally wounded with malice aforethought. To kill it quickly would have spelled electoral suicide for Howard, to leave it be would have contradicted all the corporate constituency of the US Trade Representative is about. So that constituency (the US IP sector in general and Big Pharmaceuticals in particular) has arrogated unto itself direct input into what does and does not get listed for public support. The PBS's bottom line can not survive these 'improvements', as the ultimate interest of Big Pharmaceuticals is to sell as much and as many of its lines as possible, at patients' private cost if necessary, but at Australians' public cost if possible
d) An independent PBS may look like a price-distorting body, but its capture or extermination will prove to be even more 'price distorting'. This is because the role of the 'hidden hand' as ultimate arbiter of price and allocation makes absolutely no sense in the realm of information in general and IP in particular. IP regimes are not a function of markets, they are a function of politics, and politics is the polite word we use for the play of power and interests. A patent confers and sustains a monopoly, pure and simple. The longer a corporate entity (upon which the law confers the ridiculous status of natural individual) manages to keep its monopoly, the more powerful it demonstrably is, and the less does 'the market' have anything to do with 'competition', approximating theoretically optimal price levels or achieving optimal allocation.
e) As Australia is about to adopt directly the US IP regime, it gives up all rights to control the duration of patents and copyright. So it gives up the last vestige of democratic control over the distribution of information in general and the price of medicines in particular.
f) Australia has also given up any chance it had of treating each new communications technology in the moment and according to its particular and unfolding merits. This doesn't matter if you're an economist, but it does matter if you live in a world where not all ends are capable of economic expression or calculation. If 'culture' means anything, it means the way particular people in particular places with particular histories produce meanings, practices and artefacts in responding to the questions put to them by their particular material and symbolic conditions. If it means anything like that, every particular people needs the room and the channels through which to express, reproduce and transform its culture according to local conditions. Reasoning of this sort has culminated in phenomena like public service broadcasting (the ABC and the SBS), publicly controlled telecommunications monopoly (the old Telecom), local content provisions and subsidised film and broadcasting schools. The Office of the US Trade Representative tells its constituency that Howard's Legacy affords them 'important and unprecedented market access for US film and television'. This it does because Australia has given up the right to regulate all communications technologies beyond traditional free-to-air broadcasting on criteria of cultural concern. Which is fine if you believe we need more US content here, or if you believe Australians prefer US programming. Australians don't prefer US programming at all. It simply costs the Australian economy several times as much to produce programming as to import it from the US, where said programming has already paid for itself in that giant market and may now be 'dumped' overseas at will and for what the market will pay, we get more US programming. 'Dumping' used to be a Bad Thing. And it won't mean we prefer US programming, either. In the spendthrift mini-series-mad eighties, all the Australian productions (eg 'Bangkok Hilton') outrated all the lush US productions of the time (eg 'Roots', 'North and South' etc). The new regime may not destroy Australian production, but it will compromise its cultural value, as the local market can't justify product of only local value, and only scripts and casts shorn of local significance need apply. The more significant new media become, the less mass media (eg subscription broadcasting and AV streaming) will fulfill the cultural role we used to think so important.
g) Where no formal mechanism for protection exists, the non-tariff barrier inevitably becomes the new battle-ground. The US TR document says Australia has committed itself to 'resolve sanitary and phylosanitary barriers to agricultural trade'. What does that mean? Who gets to decide whether we're genuinely protecting our apples from the diseases that infest US apples (and, let's not forget, cattle) and our salmon from the toxins that reside in US salmon or whether we're engaging in disguised protectionism? Clearly, it won't be a third party (eg the formally independent WTO). Nope, it'll be an issue we have to 'resolve' toe-to-toe with US interests. The small print is really going to matter on this one. If it's not VERY specific and unambiguous, we risk giving up much of what makes our foodstuffs marketable overseas.
h) To what degree do our agriculturalists face unfair competition under this arrangement? We already know we got nowhere on sugar (or beef ... eighteen years! Sheesh.) And we already know US agriculturalists get 100-per-cent access to our markets in return for giving Australians access to 66 per cent of their (admittedly much larger) market. What doesn't rate a mention is the significant advantage much of the US sector derives from the particularly exploitative wages and conditions that pertain where the labour is 'foreign'. Shrubya is set to legitimate this almost feudal relationship (under the guise of doing the right thing by economic refugees, natch) and there's not a word on how Australian farm workers might avoid a race to the bottom in this respect. The US is committed to 'further cooperation on labor matters ... to advance common objectives', but that means nothing where the problem is not explicitly itemised in the agreement, for mine.
i) The Australian government promises US corporations access to all government procurement. It will 'eliminate local content and manufacturing as a condition of contracts'. Which effectively means we will 'outsource' much political, administrative, strategic, financial and private information about ourselves, our businesses and our institutions to foreign concerns, whose own links with their government and other entities will be unknown to us. Conceivably, they will know more about ourselves than we do, and know it earlier, when it matters most. Potentially enormous economic and political sovereignty is consequently given up.
A strong hand well played, Mr Zoellick!