Disillusioned commentary on Australian financial sector, politics, business, media... with attention occasionally distracted to the world outside... and intermittent reminder that rage is a more life-conserving irrationality than despair.

Friday, January 21, 2005

WTO Free Trade Agreement

The Australian government prides itself on the progress it has made and continues to make in negotiating bilateral "free" trade agreements, but it is worth noting the following, in a report prepared by the Consultative Board of the World Trade Organization that was released on Monday:

"The Board is deeply concerned by the current spread of Preferential Trade Agreements (PTAs). It is unconvinced by the economic case for them and especially concerned that preferential treatment is becoming merely a reward for governments pursuing non-trade related objectives. Meanwhile, non-discriminatory, most-favoured-nation treatment - a fundamental principle of the WTO - is close to becoming exceptional treatment. *Governments need to show restraint or risk more damage to the multilateral trading system. The first test of any new initiative should be that it clearly improves trading and development prospects of beneficiaries and does not harm the interests of those outside."

The report goes on to refer to the developing "'spaghetti bowl' of descriminatory preferences". Local writers have previously expressed misgivings about the worth to Australia of bilateral free trade agreements (the one with the US in particular, given especially that a main plank is not freedom, but restraint, of trade in intellectual property). Now that the WTO itself has expressed concern about the economic case for bilateral agreements, isn't it time for our government to have second thoughts on trade policy?

Nah...

Not until Washington tells it to.

Canada may be stuck in the right armpit of Uncle Sam, but Australia is prostrate at its feet.

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