However, this agreement is far better than nothing. Yes, I share the disappointment that the agreement took the more politically expedient route of not threatening Big Sugar. However, let us be thankful for a step in the right direction. Given the Bush administration's protectionist record, I am thrilled that they are willing to bring this to Congress in an election year. I had feared they would completely wimp out and wait until 2005 if Bush is reelected.
In the words of Gerard Henderson,
The exclusion of sugar from the FTA will not make canegrowers and sugar producers any worse off than they are now. Yet the junking of the FTA would have adversely affected the prospects of other Australian industries seeking to sell on American markets... No developed economy, including Asian economies, would want to be excluded from such an arrangement. And none would sacrifice such a deal for any particular industry, including sugar.In other words, half a loaf is better than none.
What does it mean for the typical American consumer? Virtually all tariffs on lamb and manufactured goods are now gone. I'm not sure what manufactured goods we import from Australia, but we imported about $5 billions dollars worth in 2003. So I expect imports of these goods (whatever they are) and lamb to increase. Many American manufacturers will benefit from opening up Australia's markets as well. According to the United States Trade Representative office, the US already has a $9 billion trade surplus with Australia despite paying very high Australian tariffs. With the removal of these tariffs (and the currently low dollar), I expect exports to Australian to increase.
Trade is not a zero-sum game. By more efficiently exporting products that each country produced efficiently, both sides benefit. If you write your representatives, please ask them to ratify the FTA. Make it clear that your support would be even stronger if the FTA did not protect our inefficient domestic sugar producers.