AUSTRALIANS needed to overcome any fear of US economic power and grasp the opportunity of a Free Trade Agreement, according to Australian Ambassador to the US Michael Thawley.
At a breakfast gathering last week, the fifth in the WA Business News Meet the Ambassador Series, Mr Thawley emphasised the opportunities for Australian businesses and the impact an FTA would have on other Australian trade partnerships.
Following on from an address by US Ambassador to Australia, J Thomas Schieffer, to a WA Business News lunch gathering the previous week, Mr Thawley tackled the uncertainty that surrounds the current FTA negotiations.
While Australia must be realistic about the problems that may arise from negotiating an FTA with the US, there would be enormous economic benefits to Australians if an Australia-US FTA was secured, he said.
“The bottom line is that what we are looking for is opportunities for our companies to grow, opportunities for our farmers to export produce, opportunities for our companies to make better profits, to invest, to hire more people and to improve, and as a consequence of that, for our living standards to improve,” Mr Thawley told those gathered at the Parmelia Hilton.
“We are not making any choice, by negotiating an agreement, to neglect any other part of our trading interests.”
Mr Thawley said an Australia-US FTA would not only put Australia on the radar of major American corporations, but would also open doors with other trading partners, particularly in Asia.
“From an American point of view, the whole world is open to them. Everyone is anxious for US investment, everyone is anxious to have a slice of the US market,” he said.
“It [the FTA] will automatically put Australia as an option for every corporate strategy for every major corporation in the US — as Canada and Mexico are right now.
“Just getting that attention is a vitally important thing.”
“The other dimension of this, which is very important, is linkages with Asian economies.
“There are some who have said if you get close to the US economically, won’t this worry the Asian countries. There is absolutely no foundation for this.
“The fact is that the Americans are interested in Australia, partly because we are an extremely rich market and an important customer for their most highly value-added products.
“However, they are also interested in us because of our links with Asian economies.”
Mr Thawley said the concern that Australia would be dominated by the US by entering into an FTA was unfounded.
“Australians are sometimes diffident. I see this a lot in the US,” he said. “They think that the US is so big we will simply be mown over. That they won’t take any notice of our interests.
“We’ve got to get over this.
“There are some Australian companies that have been immensely successful in the US.
“We need to think about how we take advantage of the opportunities, rather than worry about some of the competition. We can actually mix it with Americanss and we can succeed.”
Mr Thawley said the Federal Government had pursued an FTA with the US due to the potential economic benefits available through becoming more closely linked with the largest domestic economy in the world.
“It is a mutually beneficial arrangement. We are not having this foisted upon us by the US, we are the ones driving this,” he said.
“We are the ones who need to keep the US engaged, who want access to the US and who want to sell things to the US.
“It doesn’t in any sense impinge on our capacity to make our own national decisions. We decide what we will do and we decide what we will not do.
“The US economy is absolutely vital. It is the richest, the biggest – 280 million people, $US100 trillion – economy. Is a vital source of technology. It is our largest source of investment.
“I can’t think of an example of an effective free trade agreement where there hasn’t been a dramatic increase in investment and in trade.
“The situation isn’t exactly comparable, but Canada has a population which is about a quarter more than Australia, but it has a GDP which is half again as big as Australia’s and that is because of its links with the US economy.
“The fact is that if we are tightly locked into the US economy there is no question that our growth will be faster and we will be much better off in terms of our per capita living standards.
“The US door, while not exactly wide open, it is open in a way that it hasn’t been open before and specifically for Australia.”
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