Saturday, April 05, 2008

Free trade for our products, not yours

Free trade agreements are usually anything but free trade, but the one that Australia is trying to negotiate with Japan is an example of how the Japanese government views free trade: We get to send you our products freely and put your less efficient companies and employees out of work, but in any area in which your country has a competitive edge, we will fight to the death for the right to restrict it as much as possible.

Agriculture is a sensitive areas with most countries and I wonder if there will ever truly be what passes for free trade there. The USA certainly does not have free trade of agricultural products. (Can you buy low-priced imported sugar in the US? If so, it must be a recent change.)

[Australian] Agicultural Minister Tony Burke has warned the Japanese they cannot have a free trade agreement under the conditions being sought by their negotiators.

"We absolutely cannot agree to the exclusions (of food commodities) Japan is putting forward," Mr Burke said yesterday, responding to the Japanese refusal to make liberalisation offers on wheat, beef, dairy products, sugar and rice - Australia's main agricultural exports.

...insist any agreement Australia signs must be fully consistent with World Trade Organisation principals, including comprehensive farm trade reform....(Gonna fail here.)

The last round of FTA talks in late February broke up badly after Japan laid out its demands for widespread agricultural exclusions.

Australia has not yet embarked on a free trade negotiation that has failed to produce and agreement and Mr Burke yesterday declined to rule out the possibility the Australia-Japan process would break down irreparably. By Peter Alford at

Will the Australians, like the US, ultimately bow to the Japanese position and claim victory? (Remember Bill Clinton's humorous auto and auto parts deal in the mid-nineties?)

My fantasy of a simple trade agreement with Japan:

Of course we understand that you have your own uniquely unique culture and tradition and therefore you should be exempt from the rules. Naturally, this prevents you from allowing your citizens to make the choice of whether or not to buy our products. That's fine. It's your country. However, you will not be able to sell one single made-in-Japan component, product or service in our country. None. Period. Neither will you be sending your government bureaucrats to our universities to learn our technologies, laws, sciences, or anything else either.

Should you ever decide that you want to be both in and of the world and are willing to allow the same type of access to your markets as you get in ours, please come back and see us with serious, concrete proposals. Otherwise, don't waste our time again. And take your Toyotas back home with you.

That is a fantasy, of course. It'll never happen. Especially the university part, for if a US university gets a whiff of Japanese money, they seem to lose control pursuing it. (I have been personally involved it this and it was an eye-opening experience.)

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