US-Australia

The US-Australia Free Trade Agreement (or AUSFTA) was signed on 18 May 2004 and came into effect on 1 January 2005. It’s a comprehensive agreement, with chapters on: Market access for goods, agriculture, pharmaceuticals, cross-border services, financial services, electronic commerce, investment, intellectual property rights, government procurement, competition policy, labour, environment and dispute settlement.

Throughout the negotiations, the contents of the agreement were problematic for different sectors on both sides of the Pacific. US farmers managed to keep sugar out of the deal, but would face new competition from Australian dairy imports. Social opposition to the agreement ran high in Australia, the major concern being access to affordable medicine. The FTA commits Australia to provide stronger patent monopolies to US drug companies, directly compromising Australia’s Pharmaceuticals Benefits Scheme (PBS).

The FTA became a key electoral issue in Australia in late 2004. However, Prime Minister Howard was re-elected and came to a final accord with the Bush administration on the drugs chapter by the end of the year, thereby assuring the agreement’s entry into force at the start of 2005.

One year into the FTA, debate broke out in Australia over the impacts. In the first year, US exports to Australia had shot up while Australia’s exports to the US had shot down. Further, US drug companies were not happy with the limited safeguards left to protect Australia’s PBS and started moving to have them scrapped.

In 2007, Australia registered a $13.6 billion trade deficit with the US, its largest ever with any trading partner. The National Institute of Economic and Industry Research estimates that the US-Australia FTA could cost the Australian economy up to $50 billion and 200,000 jobs.

last update: May 2012

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  • 8-Feb-2015 East Asia Forum The costs of Australia’s ‘free trade’ agreement with America
    The critics were right. Ten years after the Australia–United States free trade agreement (AUSFTA) came into force, new analysis of the data shows that the agreement diverted trade away from the lowest cost sources.
  • 12-Jun-2014 Sky News Australia: PM seeks to broaden free trade deal with US
    Australian Prime Minister Tony Abbott will use a meeting with US President Barack Obama at the White House to seek the reopening of the decade-long agreement, News Corp Australia reports.
  • 29-Nov-2013 Sydney Morning Herald Free-trade pact may muddy GrainCorp deal
    A side deal in the free-trade agreement with the United States that the Howard government negotiated in 2004 is a wildcard as the Abbott government deals with divisions in its ranks over Archer Daniels Midland’s $3.4 billion takeover offer for GrainCorp, the biggest grain handler in eastern Australia.
  • 12-Mar-2012 Nationals scrutiny ’threatens’ free trade agreements
    Labor has seized on Coalition disunity over foreign investment to warn that a Nationals plan for new restrictions on investment in farmland would breach the Australia-US Free Trade Agreement.
  • 25-Nov-2011 Sydney Morning Herald US to fight cyber wars with free trade
    Selling Aussie technology to the US military just got easier.
  • 5-Nov-2011 Free trade pact a dud for Australia
    The Australia-US Free Trade Agreement (FTA) has just completed its seventh year. The US Bureau of Census calculated that most marriages that end last for eight years - the itch is supposed to begin in the seventh - so the fundamental issue is whether the relationship has been good for both parties.
  • 3-Mar-2010 SMH Mind the gap: benefits from free trade haven’t quite gone the distance
    Five years on, it is clear the free trade agreement between Australia and the United States was a dud. Despite the fanfare with which the Howard government introduced it, no tangible benefits have resulted for Australia.
  • 13-Jan-2010 Fruitnet.com Free trade does little for Australia
    Five years into a free trade deal between Australia and the US and horticulture industry insiders say not much has changed
  • 5-Feb-2009 Xinhua Australia to check US-Australia FTA for American protectionism
    Australia will examine its free trade deal with the United States to see if Washington is flouting its obligations under the pact if the United States adopts a "Buy American" clause for new stimulus projects.
  • 29-Jan-2009 Aussie plea on US trade restrictions
    Australian officials are intensively lobbying lawmakers on Capitol Hill to reconsider new "Buy American" provisions that were attached to the $US819 billion ($1.25 trillion) stimulus package passed by the House of Representatives on Wednesday, amid fears that they will usher in a new era of protectionism and harm Australia’s steel exports to the US.
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