Talking points on US-Australia accord

Talking points on US-Australia accord

Critics of the pending free-trade agreement between the U.S. and Australia have no illusions that the agreement will be rejected by Congress. Even so, House and Senate debate on the agreement is expected to be lively.

Opponents of the trade pact, who have all but conceded that they will not prevail, may seize the opportunity to highlight trade issues that will be considered in other legislation. The U.S. dairy industry, for example, wants to use the debate to promote the industry's top legislative priority: a bill to impose tariffs on milk proteins and protein concentrates.

Christopher Galen, vice president of communications for the National Milk Producers Federation, said the association is focusing its energies on passing the proposed milk tariffs rather than on defeating the Australia trade agreement.

Galen said the Australia agreement is "a net negative for the dairy industry." But he added, "We're not going to dedicate a lot of resources to fight something that's got such wide support."

The Australia FTA, signed on May 18, would eliminate more than 99 percent of the tariffs covering U.S. manufactured goods exported to Australia as soon as it is enacted. After the administration proposes implementing legislation, probably this month, congressional action is limited to a yes-or-no vote, with no amendments.

The tariff legislation was introduced in March 2003 by Sen. Larry Craig, R-Idaho, and has more than 30 bipartisan cosponsors. Rep. Don Sherwood, R-Pa., introduced identical legislation in the House. Both versions have bipartisan support. Even some House Democrats who have vocally opposed other trade proposals welcomed the Australia FTA. "One of the reasons there's so much support on this side of the aisle is because there is support for workers' rights in Australia," said Rep. Charles B. Rangel, D-N.Y., ranking Democrat on the Ways and Means Committee.

The Senate Finance and House Ways and Means committees held hearings on the agreement in June. Those hearings provided good indications of the breadth of the Australia agreement's support. Although no amendments are allowed, the Senate committee proposed one change; the House proposed no changes.

The Senate committee's recommendation, which the administration will ignore, would require Congress to approve any decision by the U.S. Trade Representative to waive tariffs on Australian beef if they surpass future limits. As negotiated, the agreement allows the USTR's office to waive the tariffs in extraordinary cases.

The proposed change was sought by Sen. Kent Conrad, D-N.D., who criticized the trade proposal's agriculture provisions generally and its beef provisions specifically. "The administration has been saying over and over again that they have special, automatic measures in the Australian trade agreement to protect our beef industry - and then we've discovered that there's a huge loophole that allows the trade ambassador to disregard the safeguards," he said.

The U.S. dairy industry complains that the agreement, which covers 12 separate milk and dairy products, will increase competition for its products. The net result, according to the U.S. International Trade Commission, will be an additional 9.1 million pounds of milk proteins entering the U.S. market from Australia, an amount equivalent to 0.2 percent of domestic production.

Galen's association and a bipartisan coalition of lawmakers are most concerned about the tariffs on milk protein concentrates. The existing tariffs are low - $3.70 per metric ton - and will be eliminated in 18 years, under the proposed agreement.

"I believe the U.S.-Australia Free Trade Agreement could have devastating consequences on Maine's, and indeed our nation's, dairy industry," said Sen. Olympia J. Snowe, R-Maine. "In trade agreements, there are winners and there are losers. In this case, I believe the dairy industry cannot be considered a winner."

Snowe made her comments on June 23 when the Senate Finance Committee reviewed the administration's draft enacting bill. Snowe said she would not likely support the administration's proposal when it is returned to Congress.

To mitigate the effects of the Australia FTA on the dairy industry, Snowe said she would push enactment of the proposal on milk-protein tariffs. Australia would be exempt from the tariffs because of the free-trade agreement. Other milk-protein producers, such as the European Union, would not.