Howard reflects on 10 years since Australia–US trade agreement

3 July 2015

ABC Rural Online

By Anna Vidot

Former Prime Minister John Howard says he looks back on the Australia-USA free trade agreement with "real satisfaction", even as a former US trade negotiator acknowledges it was "terrible" that Australian sugar lost out so badly under the deal.

Speaking at an event to mark the 10th anniversary of the agreement, Mr Howard said he sees AUSFTA as "in some ways a template for the Trans-Pacific Partnership".

Mr Howard said many of his own advisors were opposed to bilateral trade agreements at the time when his government embarked on negotiations with the US, preferring the pursuit of multilateral deals.

There was broad concern in the community too.

"There a lot of scepticism, and I've been reminded that there was a lot of criticism by people at the time, who said that we were almost committing trade suicide by doing an agreement with a developed nation," Mr Howard said, noting those concerns existed in the US too.

"The idea of having a free trade agreement signed by the Unites States, with a high living standard, well developed economy (like Australia), was fundamentally anathema to many trade commentators and trade advisors in the United States for very understandable reasons," he said.

"If you fast forward to now in 2015, you can see the wisdom of Australia, and I pay tribute to the fact that this was to a large extent over time, a bipartisan acceptance , the wisdom of pursuing and building a number of free trade agreements with major trading partners of Australia."

Sugar and AUSFTA: The biggest loser

Mr Howard was joined on stage by two of the other major participants in the AUSFTA negotiations; former US Trade Negotiator, Robert Zoellick and Australia's then ambassador to Washington DC, Michael Thawley.

Mr Thawley asked Mr Howard what went through his mind when he "was confronted with the sad news from (then trade minister) Mark Vaile and myself that we couldn't get anything on sugar" in AUSFTA.

"Well, [that there would be] difficult meetings in Bundaberg and far north Queensland," Mr Howard said, to chuckles from the audience.

"And having to gently break the news to the treasurer and the finance minister that we may have to provide a little bit of assistance, adjustment assistance, to the sugar industry.

"I mean, it's a classic case of balancing politics and economics.

"The sugar industry, for decades, had been the life and soul of parts of Queensland and parts of northern NSW, and you can't just say no, forget it, bad luck, go away, don't bother me. You can't do that politically.

"Balance is very important in all of these things, and one of the great things that Australia has been really good at in a whole lot of areas, is getting a sense of balance.

"If you can go forward and take people with you with you with a bit of adjustment assistance, then the whole outcome is so much better.

"But I never really thought we'd get very far on sugar."

Howard upbraided Bush over sugar exclusion

Former US Trade Representative, Robert Zoellick, said Mr Howard was "understating his effort" on sugar during the negotiations, revealing that "the highlight of (his) USTR career" was also tied to the fate of Australian sugar in AUSFTA.

He recounted a story told to him on good authority, by President George W Bush's official note-taker, that Mr Howard called Mr Bush during the negotiations, "and urged him seven ways from Sunday to do something on sugar".

Mr Zoellick said the former note-taker, now a US Senator for Alaska, reported Mr Bush's response:

"John, you gotta talk to Zoellick. I don't have the authority to do this!"

AUSFTA was 'terrible' for Australian sugar, former US negotiator acknowledges

Australian sugar producers hope that the Trans-Pacific Partnership will finally open up access to the protected and subsidised US sugar market, which remained untouched by America's deal with Australia.

Robert Zoellick lead negotiations for the US, and told the Sydney audience "it was terrible that we didn't bring in any of your sugar" under AUSFTA.

"As somebody who believes in free trade, you know, this is an outrage," he said.

"But this is where the politics comes in.

"To be honest, we wanted to get the deal done, and through, in 2004, an election year.

"We have a senate, and in the senate there's two senators from each state.

"Unfortunately, because of the invention of beet sugar by Napoleon, we have beet sugar in every one of like 27, 28 states.

"So all of a sudden you had about 56 senators who were lobbied to oppose anything with sugar.

"So, it does show part of the challenge, and it's appropriate for scholars to analyse this, but you can't make the perfect the enemy of the good."

This article was originally published at ABC Rural Online

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Tags: Agriculture, Free Trade, George W Bush, John Howard, Robert Zoellick, Trade

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