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Last Minute Amendments Threaten US-Australia Trade Deal - 2004-08-13


The Australian parliament has passed legislation clearing the way for a landmark free trade deal with the United States. However, last-minute amendments made in Canberra could still kill the deal.

The free trade agreement was given the crucial support of Australia's Senate, after amendments insisted on by the opposition Labor party, were included by the government in the final draft of the enabling legislation.

The concession was necessary because the government does not have a majority in the Senate. Once the upper house's approval was in hand, the legislation was rubber stamped by the government-dominated lower house.

Australian Trade Minister Mark Vaile said the passage of the trade agreement marked a historic day in his country's relationship with the United States. However, there was a warning from Prime Minister John Howard that his government's acceptance of opposition amendments could still derail the pact.

The amendments were aimed at preventing U.S. pharmaceutical companies from sidestepping an Australian government scheme that guarantees access to cheap prescription drugs.

Mr. Howard said that American trade officials have made it clear they might reject the deal if they felt the amendments were inconsistent with the terms agreed to by Mr. Howard and President Bush earlier this year.

The Howard government said the amendments were unnecessary, but reluctantly included them in the legislation in order to save the agreement ahead of national elections due later this year.

U.S. trade representatives said in February that the pact delivered "the most significant immediate cut in industrial tariffs ever achieved" by the United States.

Prime Minister Howard said the deal would "add enormous long-term benefits to the Australian economy" by eliminating the vast majority of tariffs on manufactured goods going from one country to the other.

Chris Phillips of the farmers' lobby group Dairy Australia agrees that the pact provides lucrative opportunities for Australian dairy farmers. "What it will allow is a significant improvement in access for Australia's dairy products to the U.S. market, which is one of the largest, most dynamic dairy markets in the world," he says.

The agreement is due to come into force next year. Trade between Australia and the U.S. is currently worth $28 billion, with the Americans enjoying a trade surplus of $9 billion.

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