(Nov. 25) The U.S. and Australia announced plans to pursue a free trade agreement in mid-November, but trade observers are skeptical the talks will yield significant gains for U.S. produce interests.

On the other hand, the alternative is probably no better.

In a letter to the U.S. House and Senate, U.S. Trade Representative Robert Zoellick acknowledged that U.S. agriculture has serious concerns about Australia’s use of sanitary and phytosanitary measures as a way of restricting trade.

However, he said the U.S. has made progress with Australia on specific issues, including the recent opening of the Australian market to U.S. table grapes.

Zoellick said that Australia and the U.S. have agreed that phytosanitary rules must be based on science and fully transparent— meaning that procedures and rulemaking follow predictable steps.

RESTRICTIVE POLICIES

Observers agree that Australia’s import tariffs are already quite low, but its restrictive phytosanitary policies have denied top U.S. exports like Washington apples and Florida citrus entry into the market Down Under.

“Australia is one of the most protectionist countries in the WTO — certainly among the developed world,” said Bill Bryant, chairman of Bryant Christie Inc., Seattle. “It ranks right up there with Japan.”

Bryant said Australia has been notoriously slow in removing technical trade barriers — New Zealand apple exporters have been waiting for years to gain access to Australia — and the system it employs to remove trade barriers is not transparent. That makes fulfilling requirements to enter the market like trying to kick a ball through moving goal posts, he said.

While Australia’s tough import pollicies have soured many in U.S. agriculture on a possible trade deal, Bryant said he believes Zoellick is correct in pursuing a deal. Using trade negotiation as a leverage to soften phytosanitary barriers is an approach worth trying, Bryant said.

Some of the industries trying to get phytosanitary clearance for Australia include Florida citrus, California and Northwest stone fruit and U.S. apples.

TRADE PROGRESS

Meanwhile, Bryant said agriculture talks in the Doha round of World Trade Organization negotiations are moving slowly. “The Japanese have tabled a proposal that is very vague and the Europeans haven’t submitted a proposal yet,” he said.

In addition to the U.S. proposal, press reports reveal a group of developing countries called for the creation of an agricultural safeguard patterned after a Uruguay Round mechanism that would be triggered if imports increased by a set amount, or if import prices fell below a certain level. The agricultural talks are scheduled for completion by March.

On Nov. 19, the U.S. and Singapore announced a tentative free trade agreement, but Bryant said the agreement will have little benefit for horticultural exporters; Singapore’s tariffs are already quite low.

Meanwhile, Chile and the U.S. are expected to reach a free trade deal in 2003, and the U.S. is in discussions with five countries in Central America and several countries in Southeast Asia. The Chilean deal is important because it probably will serve as a template for other trade agreements in the Americas, Bryant said.