United States - Austrailia Free Trade Agreement Implementation Act

CONGRESSIONAL RECORD
SENATE
UNITED STATES-AUSTRALIA FREE TRADE AGREEMENT IMPLEMENTATION ACT

Mr. DURBIN. Mr. President, I rise today in support of the United States-Australia Free Trade Agreement. I maintain reservations about certain sections of this agreement, but overall I believe that this free-trade agreement succeeds in lowering tariffs on American goods entering Australia and will benefit my home State of Illinois.

The United States-Australia Free Trade Agreement, FTA, includes strong and comprehensive commitments by Australia to open their goods, agricultural and services markets to U.S. producers. The agreement would reduce a number of tariffs and duties currently affecting trade between the United States and Australia, reduce barriers for services and increase protections for intellectual property.

Under the trade agreement, as ratified by the bill, more than 99 percent of U.S. exports of manufactured goods to Australia would become duty-free immediately upon entry into force of the agreement. This is good for our country because increasing exports means more jobs here at home. This is beneficial to U.S. manufacturers, who expect to realize an additional $2 billion in exports a year.

Australia is a major trade and investment partner of the U.S. and is the ninth largest market for the export of U.S. goods, with a total trade close to $28 billion last year. Australia purchases more goods from the U.S. than any other country, and the U.S. enjoys a bilateral trade surplus of $9 billion. This is quite a difference from the $130 billion dollar trade deficit we have with China.

My home State of Illinois will benefit from the U.S.-Australia FTA. In 2003, Illinois' export shipments of merchandise to Australia totaled $925 million and Australia is the sixth largest export market for Illinois in 2003. Australia is an important market for Illinois goods as Illinois exports to Australia have grown significantly during a time when Illinois exports have fallen. While exports of goods from Illinois to Australia grew 12 percent over the 1999-2003 period, exports from the States to the world declined 10 percent over the same time.

Illinois exports range from agricultural and construction machinery, to engines, turbines and power transmission equipment, to motor vehicle parts, to general purpose machinery and to agricultural products. In short, people through nearly every sector of our economy will benefit from this agreement.

Illinois has lost 140,000 manufacturing jobs since January 2001 to many countries who do not have the same labor and environmental standards as the U.S. However, labor and environment have not been a source of controversy in this FTA. The Australian and U.S. economies are both modern and industrialized, and are at similar levels of development and environmental standards. In fact, Australia has a higher minimum wage than the U.S.

This agreement also extends protections for all forms of intellectual property rights. Australia agrees to extend the longevity of copyrights in order to accord protections to existing U.S. standards. Both countries also agree to ratify two international treaties involving recorded music and copyrights.

This agreement also gives our farmers new opportunities. All U.S. agricultural exports to Australia totaling more than $400 million will receive immediate duty-free access. Key agricultural products that will benefit from immediate tariff elimination include soybeans and oilseed products, fresh and processed fruits, vegetables and nuts, and pork products.

In addition, Australia also agreed to resolve outstanding sanitary and phytosanitary, SPS, disputes, chiefly affecting U.S. pork, citrus and corn. Since conclusion of the negotiations, Australia has taken steps to lift the SPS barrier against U.S. pork. This is good news for the many pork producers in Illinois.

While some of the provisions in these FTAs could serve as a model for other agreements, a number of provisions clearly cannot be, nor should they be. I believe that each country with whom we negotiate is unique; and while the provisions contained in the Australia FTA work for Australia, they may not be appropriate for FTAs with other countries, where there may exist very different circumstances.

Concerns about labor and environmental standards, however, should receive careful scrutiny on a case-by-case basis as different circumstances and situations warrant. Use of the "enforce your own law" standard is invalid as a precedent-indeed is a contradiction to the purpose of promoting enforceable core labor standards-when a country's laws clearly do not reflect international standards and when there is a history, not only of nonenforcement, but of a hostile environment towards the rights of workers to organize and bargain collectively. Using a standard in totally different circumstances will lead to totally different results. Many of us support the Australia Free Trade Agreement not only because they have good labor laws, but because they have the ability and willingness to enforce them.

I also noted that all commodities were not included in this FTA and that sugar was excluded. This exclusion should not be a precedent for future trade agreements as this could inhibit other export-oriented industries from their opportunity to win market access in future FTAs.

Without a doubt, there are parts of this agreement that I feel are less than perfect. This agreement has one very troublesome aspect to it, which has U.S. pharmaceutical industry fingerprints all over it.

This agreement gives the exclusive right of a patent holder to prevent the importation of a patented product without the consent of the patent holder.

By including this provision in this agreement, the ban on reimportation of prescription drugs into the United States becomes more than just a U.S. law, it becomes a matter of trade law.

That means that we are giving another country the right to challenge us if we pass the important Dorgan-Snowe bill allowing Americans to reimport prescription drugs from other countries, many of which have cheaper prices than the U.S. for the same drugs.

Congress is currently considering several bills to allow Americans to safely reimport prescription drugs from other countries. In fact, there was just a hearing in the Senate Judiciary Committee about this issue and the Senate Health, Education, Labor and Pensions Committee will mark up a proposal next week.

Why then is the trade negotiator for the Bush administration negotiating an issue that is being actively debated in Congress? Allowing this language in this agreement is effectively end-running the legislative branch.

On July 23, John Veroneau, general counsel for the Office of the U.S. Trade Representative, confirmed that new legislation on drug reimportation "could give rise to an inconsistency between U.S. law and a commitment under this trade agreement."

Once again, the Bush administration has chosen big pharmaceutical companies over the American people. Prescription drug prices are rising between 14 and 19 percent per year, making already expensive drugs unaffordable for some. As Congress searches for solutions, the Bush administration is preserving the protections from international price competition for the prescription drug industry.

Further, this agreement may jeopardize the lower prices the Veterans Administration and Medicaid are currently able to negotiate. Under Article 15.11 of the agreement, "suppliers" have the right to challenge VA procurement decisions, including listing and pricing pharmaceuticals.

I do think, because of the positive provisions in this FTA relating to manufacturing, agriculture services, that we should approve this agreement. However, my vote for the Australia FTA should not be interpreted as support for using this agreement as a model for future trade negotiations. I will evaluate all future trade agreements on their merits and their applicability to each country. We need to ensure that core international labor rights and environmental standards are addressed in a meaningful manner and the rights of American consumers are protected.