December 09, 2003

Farm Exports Stumbling Block to US-Australia Trade Deal

The Australia's trade minister said farm exports remain the major stumbling block in efforts to finalize a U.S.-Australia free trade deal.

After a so-called final round of negotiations in Washington between the two countries, Trade Minister Mark Vaile said last Friday that he remains confident of striking a deal in early January. But he warned there was still a way to go on agriculture, adding that the current position would not win the support of Australia's powerful National Farmers Federation.

Changing American quotas - particularly in sugar, beef and dairy - was a make or break issue for the entire deal, he said. Washington has a system of quotas for such imports, allowing certain amounts into the country before imposing high tariffs.

Vaile said U.S. President George W. Bush and Prime Minister John Howard may have to personally hammer out a final agreement.

Australia wants to sell more farm products, cars and ships in the U.S., and is seeking a relaxation of restrictions on the ability of Australian companies to bid for U.S. government contracts.

Washington is seeking more access to Australian markets for its television, radio and film industries, reform of Canberra's subsidized prescription drug scheme and the end of some state-run export monopolies for products like wheat.

Despite the stumbling blocks, Vaile said there was still "a better than even chance" a deal would be struck early 2004.