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USA boasts of trade gains over Oz

USA boasts of trade gains over Oz

Is the TPP agreement good for Australia? No, definitely not…not if you read the website of the Office of the US Trade Representative in President Obama’s office.

 USA boasts of trade gains over Oz

By Bill Rowlings, CEO of Civil Liberties Australia

Creating and keeping jobs in the USA is the main reason for the Trans Pacific Partnership trade agreement…according to the Office of the President of the United States.

The Office of the US Trade Representative (OUSTR) is part of the Executive Office of the President of the United States. Here is what that office says on its website about trade with Australia:

Australia and the United States are partners in the ongoing Trans-Pacific Partnership (TPP) negotiations. In this negotiation, the United States is seeking to develop a high-standard, 21st-century regional trade agreement that will support the creation and retention of jobs in the United States and promote economic growth.

 – https://ustr.gov/countries-regions/southeast-asia-pacific/australia at 1600, 18 May 2015

 President Obamas trade agenda is dedicated to expanding economic opportunity for American workers, farmers, ranchers, and businesses. Thats why we are negotiating the Trans-Pacific Partnership, a 21st century trade agreement that will boost US economic growth, support American jobs, and grow Made-in-America exports to some of the most dynamic and fastest growing countries in the world.

 As the cornerstone of the Obama Administrations economic policy in the Asia Pacific, the Trans-Pacific Partnership reflects the United Stateseconomic priorities and values…”

                                                             – https://ustr.gov/tpp 1700, 18 May 2015

tpp The 18th round of TPP negotiations will take place at Kota Kinabalu, Malaysia, from July 15-25.

As background to the TPP agreement, it is useful to look at what has happened to trade between the USA and Australia since the US-Australia Free Trade Agreement entered into force on 1 January 2005. These figures, in US dollars, are from the OUSTR website:

  • US goods exports to Australia in 2013 were $26.0 billion, down 16.4% ($5.1 billion) from 2012, but up 99% from 2003. US exports to Australia are up 87% from 2004 (pre-FTA).
  • US goods imports from Australia totaled $9.3 billion in 2013, a 2.9% decrease ($277 million) from 2012, but up 45% from 2003. US imports from Australia are up 23% from 2004 (Pre-FTA).
    THAT IS, US exports to Australia were up about 87%; Australian exports to the US were up about 23%. In other words, the FTA has benefited the USA about four times as much as it did Australia in terms of exports/imports of goods, Civil Liberties Australia notes.
  • US exports of private commercial services* (ie, excluding military and government) to Australia were $17.2 billion in 2012 (latest data available), 6.0% ($972 million) greater than 2011 and 227% greater than 2002 levels. It was 148% higher than 2004 (pre-FTA).
  • US imports of private commercial services (ie, excluding military and government) were $6.8 billion in 2012 (latest data available), up 4.9% ($319 million) from 2011, and up 125% from 2002 level. It was 74% higher than 2004 (Pre-FTA).

THAT IS, US exports to Australia of private commercial services were up 148%; going the other way, Australian exports to the US were up 75%. In other words, the USA has benefited twice as much as Australia has from the US-Australia FTA in these areas, CLA observes.

Note: military and government trade is excluded from these figures. Government procurement typically comprises 10% to 15% of a country’s GDP.   https://ustr.gov/issue-areas/government-procurement   Military and government trade is believed to be overwhelmingly favorable to the USA in trade with Australia. Adding in military and government trade would only skew the benefits even more markedly towards the USA.

PS: if you take the official US Office of the US Trade Representative boost-to-trade figures – which on their website mainly quotes comparisons to 2009, rather than more recent ones – the imbalance is even worse:

 The United States-Australia Free Trade Agreement (FTA) entered into force on January 1, 2005. U.S. two-way trade with Australia was $26.7 billion in 2009, up 23 percent from 2004. U.S. goods exports were $18.9 billion in 2009, up 33 percent from 2004, and U.S. goods imports were $7.8 billion, up 3.5 percent from 2004.

 – https://ustr.gov/trade-agreements/free-trade-agreements/australian-fta 1730, 18 May 2015

 IN OTHER WORDS, the US claims the impact of goods export-over-import benefit to the USA about tenfold what it was to Australia in the first five years.

This instant inequality is not unusual in trade agreements negotiated by Australia, where most of the up-front benefit can be to another country (as it is to South Korea in a recent FTA), and benefits to Australia kick in only about 15 years later…by which time a new agreement has frequently been negotiated, Civil Liberties Australia says. It is lose-lose negotiating by Australia.

Also read With Push For Trans-Pacific Partnership, U.S. Undermines Public Interest Policies Of Partner Nations

One comment

  1. TPP is good for American business interests, not for the middle-class or poor of Australia, or of the US. The US government has a very long and sordid history of taking care of “big business,” by passing legislation to circumvent treaties.

    A treaty of this magnitude should be not be made unless there is a referendum. On several occasions I have written to my MP, but he pointlessly parrots the party line. Thank you for the work you do

    – Bill Gillespie, Adelaide

    Ian Gillespie

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