United States-Australia Free Trade Agreement Implementation Act

UNITED STATES-AUSTRALIA FREE TRADE AGREEMENT IMPLEMENTATION ACT

Ms. COLLINS. Mr. President, I rise in support of the Australia Free Trade Agreement. On balance, this agreement is overwhelmingly beneficial to the State of Maine, and to the country as a whole. Critical to my decision to support this agreement is the fact that it will provide new and expanded opportunities to Maine businesses that want to expand into the Australian market. This agreement will create and support good jobs in my State.

It is clear that businesses across Maine are interested in initiating or expanding trade with Australia. The Maine International Trade Center held a seminar recently on export market opportunities in Australia. Representatives from more than fifty Maine companies, including many small businesses and manufacturers, attended.

It is no wonder: the United States has a trade surplus with Australia of $9.1 billion, the second largest trade surplus of any U.S. trading partner. Australia is a net consumer of United States exports and particularly United States manufactured goods. Ninety-three percent of United States exports to Australia are manufactured goods, and 99 percent of these goods will be duty-free if the agreement is implemented. The National Association of Manufacturers predicts that the agreement could result in nearly $2 billion per year in new United States exports of manufactured goods to Australia, a boost to our hard-pressed manufacturers.

In addition, Australia is the 15th largest economy in the world and has been growing over the past few years while the rest of the world is in recession. This means more Australian buying power-and many new opportunities for Maine and United States companies to export their products to Australia.

Australia has a strong and vibrant trading relationship with Maine. Australia is Maine's 12th largest export market, and in 2003, Maine exported nearly $29 million in high-value goods, such as electrical equipment, computers, and paper products, to the country. The agreement will make these goods 99.25 percent duty free, on average, in the Australian market.

Maine's forest and paper products industry will be stronger and will be able to grow as a result of this agreement. The agreement lifts all Australian tariffs on all U.S. forest products, which currently face tariffs up to 5 percent. This is important, because the United States is Australia's second largest supplier of paper and paperboard, with exports totaling $178 million in paper products in 2003.

Expanded access to the Australian market will directly benefit Maine mills. For example, International Paper's mill in Jay ME, exports about 1,200 tons of paper to Australia every year. These exports currently face a 5 percent tariff. If the free trade agreement is implemented, the tariff will be eliminated, and International Paper will be able to fulfill its plans to increase the amount of paper it exports to Australia from Maine, preserving and even increasing the number of jobs supported by the mill.

The agreement will benefit other Maine companies as well. The elimination of tariffs will enable FMC Coporation's Rockland plant to significantly expand its export of carrageenan products to Australia. In Southern Maine, National Semiconductor and Fairchild Semiconductor will benefit from the agreement's elimination of tariffs on all U.S. high-tech manufactured goods and from expanded opportunities for U.S. suppliers to compete for a broad range of Australian government contracts.

The Maine Potato Board has endorsed the agreement because it will open and expand Australian markets for Maine potato products. The MPB notes that the long-term success of the Maine potato industry is absolutely dependent on the growth of new markets.

Despite the overwhelming benefits of this pact, I do have some concerns with this agreement. While Maine does stand to reap substantial benefits, I am disappointed that the United States Trade Representative has included language that conflicts with the goal of drug reimportation.

One of the greatest challenges facing American consumers is the high cost of prescription drugs. That is why I have long supported legislation to allow Americans to benefit from international price competition on prescription drugs by permitting FDA-approved medicines made in FDA-approved facilities to be imported into this country.

Despite the ongoing debate in Congress and the strong support for drug reimportation on the part of the American public, I am disappointed that our trade representatives have insisted on including language in this trade agreement that is contrary to these critically important efforts.

The Australian government already bans the export of drugs subsidized under the Australian Pharmaceutical Benefits Scheme. Since 90 percent of the drugs prescribed in Australia are subsidized, Australia would not be a significant source of supply of imported drugs into the United States, with or without this agreement. Drugs imported into the United States are far more likely to come from Canada and Western Europe.

I am concerned, however, that these provisions set a bad precedent. While Australia itself is not necessarily a good source for imported drugs, this language could become a template for future agreements.

I am also disappointed that this agreement provided some additional market access for Australian dairy products in the U.S. market. However, I am pleased the final version of the agreement includes marked improvements over initial drafts. For example, the agreement gradually phases in limited increases in dairy imports over an 18-year period. In addition, the agreement maintains the current U.S. above-quota tariffs on dairy products indefinitely. These improvements were included in the agreement after I joined with my colleagues in sending a letter to U.S. Trade Representative Robert Zoellick asking that the interests of our dairy farmers be taken into account as the agreement was negotiated. The inclusion of these provisions, in addition to my consultations with Maine's agricultural leaders, has led me to conclude that this agreement will not have a significant impact on Maine's dairy industry. Moreover, Australia currently exports only a small amount of MPCs to the United States, and this agreement will not change this.

Australia is one of our oldest and most reliable partners. The country is a growing market for high-value U.S. exports from both Maine and the country. The free trade agreement we are considering today will strengthen the economic and diplomatic ties between our countries. On balance, it is good for Maine, and for both countries.