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U.S.-Australia Free Trade Agreement

Location: Washington, DC

U.S.-AUSTRALIA FREE TRADE AGREEMENT -- (Extensions of Remarks - July 16, 2004)

Mr. UDALL of Colorado. Mr. Speaker, I rise in qualified support of the U.S.-Australia Free Trade agreement.

I support the trade agreement because it will open up markets for American goods and services. Our two countries already have a strong trade relationship-Australia is the ninth largest goods export market for the United States, with total trade close to $28 billion last year. The agreement will only strengthen this relationship further.

Colorado, in particular, stands to gain from the agreement. Australia imported $113 million of goods and services from Colorado last year and is the 12th largest foreign market for Colorado. This agreement will only increase opportunities for Colorado businesses to find new markets for their goods and services.

I support the bill because under the trade agreement, nearly all U.S. exports of manufactured goods will immediately become duty-free. Since manufactured goods currently account for 93% of total U.S. goods exports to Australia, this is significant. In fact, estimates are that the elimination of these tariffs could result in $2 billion per year in increased exports for our U.S. manufacturers.

I am disappointed in provisions in the agreement on beef, but am encouraged that duties are gradually phased out. I am also disappointed in the agreement's provisions on wheat. I know that wheat growers are concerned about potential trade distortions and had urged negotiators to seek reform of the state trading enterprise, the Australian Wheat Board (AWB). Though the agreement doesn't reform the AWB, Australia did agree to work with the U.S. in the WTO to eliminate restrictions on the right of private entities to export agricultural products. This is a step in the right direction.

I am concerned about potential precedents that this trade agreement could create. For instance, the trade agreement requires both countries to enforce their domestic laws on labor and environment. This is acceptable in this treaty, since Australia boasts strong labor and environment laws and good enforcement mechanisms. But this approach isn't acceptable in all agreements. I am disappointed that the Administration didn't apply the U.S.-Jordan agreement model to this agreement by including labor and environment standards within the text of the treaty itself.

I am concerned about the potential precedent of the Administration meddling excessively in the internal affairs of a trading partner. With regard to this treaty, the USTR initially sought substantial changes in Australia's drug-pricing program. Though USTR was not completely successful, the agreement does give U.S. drug companies more say in what drugs are included under Australia's universal drug coverage program. While market access for U.S. goods is important, we shouldn't be in the business of bullying the world and potentially undermining a country's ability to provide prescription drugs to its citizens.

Precedent is also a concern with regard to the agreement's incorporation of the U.S. law that protects the right of drug companies to prevent importation of products on which they own patents. Although this is of no practical concern in this agreement given Australia's own laws prohibiting the export of its subsidized drugs, I hope the Administration doesn't plan to use this trade agreement to reinforce its opposition to imported drugs. I don't understand why the Administration included the patent law provision, and I hope we won't see this in future agreements.

I don't believe that the concerns I have listed outweigh the potential good of the bill, so I will vote in support of it today. It is not perfect, but I believe it represents an agreement that is essentially free and fair. Expanded trade is important to this country and the world, but it will only be beneficial to a broad range of people in our nation and in other nations if it is carefully shaped to include basic standards and protect workers' rights and the environment.

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