OPINION: by John CorboyNews Weekly
Knifed on altar of free trade
, September 16, 2006
Canberra's zeal for free trade is killing agriculture, argues John Corboy, chairman of the Fire Blight Taskforce.Who pays for free trade? Is it the bureaucrats in Canberra who keep telling us free trade is good for the nation? Or is it the politicians or the National Farmers' Federation's economic advisers?
Do any of these groups sacrifice their salaries or lucrative superannuation packages in the name of free trade? Of course not.
Yet these people keep on talking about taking away what's mine. It's us farmers who must sacrifice our standard of living in the name of free trade, not these bureaucrats.
I'm tired of other people giving away my money and my employees' money without making a sacrifice themselves. If I have to compete with Chinese farmers, then why shouldn't these bureaucrats be paid Chinese wages? Seems fair.
But we all know that's not going to happen. In the same way, we all know the Europeans and Americans aren't going to sacrifice their standard of living by making any major cuts in their tariffs and subsidies.
This reluctance is logical and the reason why the World Trade Organization's Doha round of negotiations failed.
If you remove these barriers, you either lose large sectors of your economy or else force people in these industries to work for wages similar to those experienced in China or India.
The EU and the U.S., with their high standards of living and high wage costs, are not willing to make the sacrifice. The Europeans would never expect their apple and pear growers to accept a Chinese standard of living. Neither would the U.S.
Yet the Australian Government and even the NFF seem happy to sacrifice Australian horticulture in the name of free trade.
The reality is there is no such thing as free trade and, while the economy of the world is controlled by countries that have high standards of living and large cost of labour, there never will be free trade.
Our attempts at opening up our own economy to free trade have helped increase our net foreign debt from about $70 billion to about $500 billion. We now import about $7 billion worth of agricultural produce annually. This is in a country where we are self-sufficient in food.
Those of us in the manufacturing and agricultural sector are used to seeing our jobs exported, but now we are seeing our IT jobs exported, Qantas maintenance contracts going overseas and other "high-tech" jobs going offshore.
Politicians and economists talk about moving people out of inefficient, uncompetitive sectors into others where the nation has a competitive advantage.
Well, in Australia's case, this means we lose the manufacturing and horticulture sector to China, and IT and biotech jobs to India.
In a world of pure free trade, Australia would become no more than a quarry and perhaps a grain producer.
It's obvious I'm no great proponent of solving the world's problems using free trade. I don't think it's in our national interest and don't think it creates a fair world. What we really want in Australia is fair trade.
For example, if the Europeans slap a 20 per cent tariff on our canned fruit, then we should reciprocate with a similar tariff on their canned fruit coming in here.
I have to get out of bed each morning and remind myself that I have to be 42 per cent more efficient than a European farmer, just to be in the game.
If we're going to survive, then we must, at least, be able to start countering the trade imbalance by implementing tariffs on imports from countries that do the same to us. That's only fair.
But experience has shown that, even when it comes to bilateral trade agreements, we're not very good at it.
A clear example of that is the U.S. free trade agreement (FTA), which was sold to us as delivering $5 billion in trade benefits to Australia.
But if you look at the ledger, in the first year the balance of trade deficit has widened in the U.S.'s favour. The U.S. FTA, particularly in agriculture, allows U.S. canned fruit into Australia without any tariffs, yet we will have to wait 18 years before we get any canned fruit into the U.S.
So, if Australia is going to remain relevant in agriculture, we need to have at least tit-for-tat tariffs.
Is free trade dead? I think the reality is free trade has never been alive. It's pretty hard to kill something that doesn't exist. We should not be looking for the ultimate panacea.
We should instead be putting in place reforms that deliver fair trade, where we're on an equal footing. In some instances, that may mean agreeing to reduce tariffs with some of our trading partners. With others it may mean introducing tariffs.
This is what we do in our everyday life. If someone works with us in a positive way, they get the benefits. If they don't, we don't do business.
If we want to preserve some of our industries, we should introduce tariffs. They cannot survive while Europe and the U.S. have exceptionally high tariffs and government support.
It will be very difficult to change the Federal Government's mind on tariffs. Our biggest problem is there has been an enormous amount of investment in the philosophy of free trade.
What I've learnt in life is that it is very difficult to admit when you're wrong.
The facts are that until you have the courage to admit you are wrong, you cannot get on with fixing the issue.- John Corboy is an orchardist from the Goulburn Valley, Victoria. His opinion piece is reproduced by kind permission from The Weekly Times (August 2, 2006).