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US Trade Agreement with Australia Nears Approval - 2004-07-14

The House of Representatives and Senate are moving toward approval of a key free trade agreement with Australia. The House gave overwhelming approval to the agreement Wednesday, while congressional committees complete work on a trade accord with Morocco.

Under "fast track" procedures Congress approved in 2002, the Bush administration has been busy negotiating a number of trade agreements it says will benefit U.S. consumers by making foreign markets more accessible.

The U.S.-Australia accord, which removes nearly all tariffs on U.S. manufactured goods exported to Australia, is a cornerstone of the approach, and close ties between the two countries provided it with bipartisan support in Congress.

"It is a first-rate, state-of-the-art agreement that will spur growth and create jobs for Australians and Americans alike," said Republican Congressman David Dreier. "But the vote that we have before us today is bigger than just this one agreement. The free trade agreement that we have negotiated with Australia is a significant piece of our overall economic growth and trade liberalization agenda."

However, there were differences over some provisions of the agreement. Critics, for example, say they will make it difficult for Congress to change U.S. law to allow reimportation of U.S.-patented drugs from other countries.

The importation of drugs is one of the key issues in the U.S. election campaign. Democratic lawmakers say provisions in the Australia agreement favor large pharmaceutical companies and are an attempt by the Bush administration to establish legal precedents against drug importation.

Congressman Tom Allen, a Democrat from the state of Maine, says White House-supported provisions could raise barriers to free trade in pharmaceuticals.

"One provision gives drug companies the right to block reimportation of their products back into the United States," he said. "Since Australian law already prohibits this practice, the provision is not necessary. So why is it here? To set a precedent. If applied to trade relations with Canada, this provision would allow legal challenges under trade law to the reimportation bill that many of us favor as a source of affordable medicines for our constituents."

Democratic objections also reflect anger over the approval by the Republican-controlled Congress last year of a major Medicare drug bill prohibiting the U.S. government from negotiating with pharmaceutical companies on prices Americans pay for drugs.

The U.S. trade representative says nothing in the accord with Australia will lessen Congress's future flexibility on drug reimportation issues, such as those with Canada. Australian law already prohibits exports of about 90 percent of drugs manufactured in that country.

In the Senate, meanwhile, action on the U.S.-Australia accord accelerated as a key committee approved the agreement setting the stage for earlier Senate action than had been anticipated.

And Congress is also speeding up action on a free trade agreement with Morocco, as lawmakers prepare for possible final votes before scheduled congressional adjournment next week.

Officials of the Bush administration say they are making progress on the administration's trade agenda, having achieved approval of accords with Singapore and Chile last year, and started negotiating agreements with a range of countries from Africa and Asia to the Middle East.

However, efforts to achieve easy congressional approval of a Central American Free Trade Agreement (CAFTA) are not doing as well, as Democrats, with support from major labor unions, press for tougher labor and environmental provisions.

Trade agreements and their impact on employment in the United States, are an issue in this U.S. election year.

Senator John Kerry, the presumed Democratic party nominee for President, opposes the Central American pact, and says he would review existing trade deals if he is elected.