He was a shining new hope. Now he’s proved what we all knew, deep down, that the big parties are slaves to America, salesmen for big business, frightened of big media, and scared of representing the Australian people, either through avarice (big donations) or a simple failure of courage.

 

Opposition to the FTA could have won Latham an election, if he’d had the guts to go for it at a grassroots level. What a shame. Instead, he wants to use taxpayers money to help the losers, and there will be many. That’s us paying for American profits. Cool.

Maybe both Latham and Howard figure the disasters to follow from the agreement won’t worry them because they’ll be medium term. That’s the lack of quality of our leaders today.

You only have to read John Garnaut’s piece in last Saturday’s SMH News Review to understand the extent of the capitulation to the mighty power of American multinationals and Howard’s pure self-interest in being SEEN to get something for taking us to war against Iraq against our will. Garnaut reported that Trade minister Mark Vaile went to the US after Saddam’s statue fell with five top priorities – including ending US protection on sugar, dairy and beef, which would “account for the majority of benefits Australia might hope to gain”.

The U.S. said no to all of them, AND demanded a loosening of Australian controls on drugs prices, local media content and quarantine, all previously ruled out by Howard.

Howard then gave in on just about everything to secure the deal. Canada and other nations exempted culture policy from their deals – we didn’t even do that! This from the man who blathers on about not giving away our sovereignty to foreigners on human rights, and has now stopped future governments from protecting local content in new media!

Latham didn’t have the guts to say no immediately – he would have been supported by Australia’s top economists had he done so – and begin fighting the case for Australia by communicating with Australians. Now, he’s doing a Beazley. Like Beazley after Tampa, he’ll tell Caucus today to fall into line or risk losing the election. Latham is ushering in an era of Australia as 51st state, except without voting rights. Hurrah.

Tonight, Webdiary’s trade expert Brian Bahnisch summarises the countdown to Latham’s capitulation and Bob Phelps of the GeneEthics Network goes to town on the deal. But first, ALP member and Webdiarist Guido Tresoldi predicts what is to come for Latham as the hope he inspired turns to dust.

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Guido Tresoldi

I am responding to your views about ‘Latham vs the FTA’. The deal is as good as signed, after the ALP Senators recommended that it should be passed.

I am not a fan of the FTA, and I hope that Latham will reject it. But I expect that the onslaught against Latham from yourself and many Webdiarists will be relentless if he passes it, as is likely. Again, disappointment from those on the left about how the ALP has ‘betrayed’ its principles.

But is that the case? What about if the ALP has looked at the FTA and came to the calm conclusion that while it is not great there are insufficient reasons to block it?

No, this will be seen as ‘spineless’ ‘lack of leadership’ ‘small target strategy’, ‘Latham has blown it’, same as the Liberals etc etc.

I thought that the commitment of withdrawing the troop from Iraq which caused an avalanche of criticism from the President of the United States down would show that Latham is not that spineless.

If Latham does knock the thing back expect an avalanche of obfuscation from Howard (and his supporters in the media) with a deadly mix linking the rejection of the FTA, with Latham ‘anti-Americanism’ and leaving us exposed to terrorism threats etc.

In the heat of an election campaign this could be a great ploy. After all he has done it before with the refugees (remember the subtle, but effective refugee=potential terrorist link?)

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Margo: The FTA is no Tampa. Sold the right way, by bypassing the mainstream media and getting down to the grassroots, could inspire Austraians across the voting spectrum to support Latham and Labor. He’s not game. Why????

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FTA update, by Brian Bahnisch, author of ‘Picking the low-hanging fruit first’ in The U.S. Free Trade Agreement – always a silly idea, now a deadly trap for Australia.

Weekend roundup

Over the weekend there was a range of articles about the FTA. Essential reading included Alan Ramsey and John Garnaut in the Sydney Morning Herald.

A new twist was that Peter Cook circulated all the chapters of the Senate Report, but wanted to hear from caucus before writing his recommendations. It seems clear that what the shadow ministry decides is what caucus decides. In this regard, the articles by Alan Ramsey and Mark Davis make clear that Latham is really the determining factor. Ramsey lined up the shadow ministry and identifies which way he reckons each will jump. He believed it to be fairly evenly divided.

Of particular interest, though, is the notion that the left is strongly against while the right is much more luke-warm in it’s support for the FTA, and many of the right and centre would be happy to support the “no” position if that is the way it goes. Ramsey’s Labor insider suggested that if the FTA was approved by Latham it will sap the enthusiasm of the foot soldiers in the election contest. They would be inclined to go home after three hours of door knocking, rather than putting in five.

Queensland Premier Beattie on Lateline was a huge disappointment. I agreed with his statements that we have to use our brains more and that to the Americans we are of miniscule importance. More so in terms of geostrategic matters and support for their military adventures than trade as such. Other than that he was off the mark and his examples were way off. Simplistic and wrong-headed in my opinion.

He spoke of Brazil taking a delegation of 400 to China. This had nothing to do with an FTA. He should have realised that Brazil is taking it up to the US on trade in the FTAA (free trade for the Americas), stuck it to them in the WTO and is trying to revive Mercosur, an EU type agreement with neighboring countries, much to the displeasure of the US.

He spoke of the need for US capital and gave the example of the AMC, the magnesium debacle near Rockhampton. This is what Beattie is referring to when he speaks of “light metals”. AMC ran out of money for sure, but I understand the real problem was bad management. A sick joke, in fact. Getting US capital 0.05% cheaper (the CIE guestimate) has zip to do with its current prospects.

John Garnaut’s piece is definitely worth a read. His story of how the deal was concluded is the first more detailed account of what actually happened, and roughly accords with what I had thought. In the end the negotiating team were divided over whether they should make the final concessions to clinch the deal. One phone call between John and George and the deal was done.

Consider the position Mark Vaile found himself in. As a National he could never have signed up to this thing. For Howard, then, it has the added advantage of separating the Nationals from their constituency. What better politics than two wedges in one!

Monday am roundup

Mark Latham was in North Queensland. Whatever meetings of caucus, shadow cabinet, the leadership group, the Senate Committee or subsets thereof occur, the important interaction was on the phone between Latham and Peter Cook as chair of the Senate Committee.

Laura Tingle in the Australian Financial Review suggests Latham’s leadership is on the line this week. It is make or break for him. Tingle is typically severe on Latham, but she could be right. The left will wear being rolled – they have had a lot of practice at it. But the enthusiasm of their foot soldiers in the actual campaign will be drained as Labor moves from a Party of restored hope to the least worst option. And that is unlikely to prevail against John Howard’s ruthless focus on the main game, ie. achieving power by any means available.

Michelle Grattan’s article Labor’s body corporate in The Age similarly sees Latham’s decision on the FTA as a test of his leadership credibility, this time with the business leadership. He must pass it or he’s got none.

I’m sorry, Michelle, but I think you’ve got this one wrong. Latham needs to introduce a few policies that the business leadership won’t like, and he needs to be seen by the Labor faithful as not getting too cosy with business, as some of his predecessors did. In a recent article in theBusiness Review Weekly we were told that Simon Crean has been having lots of discussions with individual business CEO’s, bypassing the predictable reflex positions of the peak groups. Simon has been deliberately keeping low profile to give the new leader clear air.

Ross Gittins at the SMH made another useful contribution in Trade deal a free kick for US software racketeers:

Competition is what drives the sector, the barriers to invention are very low, and any good computer science student should be able to toss off a dozen “patentable” ideas before breakfast. There is no massive intellectual investment to protect, and although in some cases the software itself that crystallises a set of ideas may take years to write, it is covered under copyright law.

Software patents are bad news for Australian companies who will be forced to play an expensive legal game against people who are ruthless professionals. They are bad news for Australian users, who will pay monopoly prices for software. And they are bad news for Australian software engineers, who will find lawyers designing their programs.

Existing copyright law is all the protection computer software needs. Anything else is a free kick for the US software patent racketeers.

The Australian’s Glen Milne had an anti-union rant. More seriously, he claimed that the AMWU has based its intellectual case on a study by the economist Peter Brain. These intellectual underpinnings of the Labor Left “have been cut and diced by Australia’s foremost trade doyen, Alan Oxley”, he wrote.

I’ll need to look into this a bit more, but on the surface I find it astonishing. Peter Brain is a respected economist, with a brain, who has a lot of credibility in regional and rural Australia. He thinks for himself, is not a camp follower, and famously predicted the 1997 Asian financial crisis.

On the other hand Alan Oxley we know has a mouth – we hear it all the time on the ABC. He will say anything to win an argument in favour of free trade in which he has a clear vested interest. Remember he was the one who assured us clearly, without any equivocation, and with derision towards those who suggested otherwise, that the Pharmaceutical Benefits Scheme would NOT be included in the FTA. Had nothing whatsoever to do with it, he said; a completely separate issue, he said.

Re Tony Kevin’s article in A plague on both their houses on the FTA, overall, it was right on the nail! Herewith a few comments.

We are not short of capital in this country, but we are short of risk capital especially in some industries that are important to our future. One such is the biotech area in general. We are also almost totally dependent on overseas majors to exploit our significant intellectual capital in the discovery and development pharmaceutical drugs. We have a plethora of small companies with one or a handful of products launching themselves on the market. The successful ones are easy pickings for takeover.

We don’t seem to understand that the successful Asian globalisers did it by governments picking winners, protecting growing industries while they are established and then launching them on the world. Think Korean steel, for example.

Furthermore they did it by limiting foreign investment, insisting on local equity partners and technology transfer. Now that they have successful industry clusters they can afford to take a more relaxed approach.

Tony Kevin is spot on in pointing out that the foreigners will buy up our winners. The $800 million limit on an automatically granted takeover by an American company translates into a company about the size of the Bank of Adelaide. Such companies are well established and can have an after-tax profit of up to $60 million. The hard yards have been done. The Americans will simply be able to monitor the field and buy the best without conditions attached.

Kevin is right to be concerned about the car industry, as it is one of the few genuine industry clusters we have and the heart of our manufacturing industry. We are good at complex rather than simple parts, such as lightweight brakes and we supply the wheels for Harley Davidson’s, for example. We design new models with a fraction of the fuss and manpower the Americans would use and in less time.

GMH is well integrated into a global production system and Ford could become so too. Toyota is the problem initially as it does not make special models for Australia and you would think that at some time in the future they would consolidate their operations in Kentucky.

The other problem is American part makers making cheaper parts in Mexican factories, marking them “Made in the USA” and trucking them across the border to export duty free to us. We would lack the capacity to protect ourselves from that sort of cheating. It requires the will and the resources of a multinational to do the necessary leg-work.

The car industry is essential to Australia’s industrial future and should not be put at risk, as I believe it will be under this FTA.

Meanwhile at the WTO

Meanwhile at the WTO in Geneva it seems they have a deal which promises a wind-back of agricultural subsidies in the rich countries. Note the word ‘promises’. That has been done before. This time the G90 group of poor countries will have to hold them to it.

It’s important to realise though that in many of these countries there are elites who benefit from more trade, whereas the poor do not always benefit. At least not inevitably so as the World Bank and the denizens of capital would have you believe. Sometimes too the poor get screwed by their own governments in the process of ‘globalisation’.

There are too many angles to this deal to go into here. For our farmers there is little to cheer. The majors will use “special product provisions” to protect their domestic farm sectors from harm. This means in effect that you will have the right to sell into their markets as much as you like as long as you don’t actually do so – in any quantity, that is. Then they will stop you dead with tariffs and/or quotas.

This is no surprise as it is already a feature of the gradual opening of the US market to our farmers under our wonderful FTA.

In general, however, the WTO deal will not slow the impetus to bilateral and regional deals.

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Bob Phelps, Executive Director, GeneEthics Network

Australia’s national interests and sovereign independence will be gravely damaged if the ALP votes with the Coalition to legalise Howard’s and Bush’s so-called Free Trade Agreement with the USA. The ALP’s prospects of winning the federal election will also be lost among voters who want an end to the government’s sycophantic pandering to US interests.

Many Australian’s see merit in free trade, but the US economy is run by corporate interests which flout free trade rules and do not accept a level playing field for their competitors. For instance, the US government’s Farm Bill continues to subsidise US farmers with US$333 billion over the next decade and the FTA would delay more Australian farm exports to the USA into the distant future.

This bilateral agreement is not free or fair and Australia would continue to be the Deputy Sheriff, up against an economy hundreds of times bigger than our own.

The WTO’s multilateral system offers protections, such as the Sanitary and Phytosanitary Rules and dispute resolution for all parties, but the bilateral proposal does not.

Genetically engineered (GE) crops and foods would be forced down our throats and onto our farms, ending our hopes of keeping Australia as the world’s GE-free food bowl, with free access to world markets.

The FTA would open the way for the USA to insist on:

* ending our labelling of GE foods (weak as our laws are);

* watering down our quarantine rules that help protect Australia’s clean, green, GE-free farms;

* weaker risk assessments of GE crops and foods coming into Australia than those provided under WTO rules;

* ending state bans on the commercial planting of GE canola;

* permanently refusing to sign and ratify the Biosafety Protocol, to help reduce contamination by GE organisms transferred internationally;

* free access for GE and other foods from the USA, even though these are subsidised with US$33 billion pa under the US Farm Bill.

Most Australians want fair trade and the right to choose local, fresh GE-free foods.