A MIXED response has greeted the Australia-United States Free Trade Agreement announced this week.
A MIXED response has greeted the Australia-United States Free Trade Agreement announced this week.
Most industries are waiting for more detail on the deal to emerge.
While agriculture remains a sticking point, the resources and manufacturing industries, particularly in shipbuilding, could benefit. Households will also be better off with a greater selection of imported goods at cheaper prices.
However, the agricultural and wine industries’ initial reaction has been one of disappointment concerning the long implementation times for tariff reductions on US beef and wine imports.
Chamber of Commerce and Industry chief economist Nicky Cusworth said while the opening of the US market was good news and would provide a long-term net benefit to WA, it was also important not to overstate the benefits of such an agreement.
“We wouldn’t want to exaggerate the benefits of the AUSFTA. It is not a free trade agreement. It is a trade agreement – it is very partial and very preferential,” she said.
“It is a step in the right direction but we feel that more could have been done.”
Ms Cusworth said one area where WA was set to benefit was in the relaxing of foreign investment rules, which will make it easier for major resource projects – that are often heavily reliant on overseas investment – to secure funding and get off the ground.
WAFarmers president Colin Nicholl said the long phase-in times were the biggest disappointment resulting from the agreement, particularly where beef was concerned.
WA has a relatively small two million head beef herd when compared to Austraia’s 26 million head herd so the AUSFTA would have limited impact on the State.
However, Mr Nicholl said more detail concerning how agricultural issues were handled would be required.
Conceding the deal would benefit some industries, he said it was likely any agricultural gains would be enjoyed by the eastern States more than WA.
“There will be some opportunities for dairy but it will more likely be sourced out of the eastern States than WA because they are closer to the US market,” Mr Nicholl said.
“Obviously there will be gains in manufacturing but we got a shoddy deal in terms of agriculture.
“America has shown great hypocrisy here because the US has demanded greater access to foreign markets around the world without really freeing up their own.”
Wine Association of WA CEO Sarah Dent expressed disappointment in the 11-year implementation time frame on wine tariffs.
“The easing of the tariffs will provide benefits and we would certainly have liked to have seen that implemented immediately but this brings us into line with [the] Chile-US FTA that caused the reduction of tariffs over 12 years,” she said.
However, Ms Dent said the association had given in-principle support to the AUSFTA despite lobbying for changes in three key areas including tariff reduction, improved wine labelling and distribution.
Overall, however, Curtin University’s Institute for Research into International Competitiveness director Peter Kenyon said WA would not be greatly affected by the AUSFTA.
“The most important thing is not to think of this as a one shot game. It is an ongoing negotiation through time,” he said.
