The Guardian July 14, 1999

"Free trade" or "mutual benefit" trade?

Prime Minister Howard sounded almost revolutionary as he castigated the 
US and its President over the imposition of tariffs on Australia's lamb 
exports to the US. "Hypocritical", "appalling" and "unfair" were some of 
his adjectives.

It is unlikely that when, face to face with the US President this week, he 
will use such undiplomatic language. Rather, he would give the President a 
lecture about making a public commitment to push "free trade" at the 
forthcoming World Trade Organisation (WTO) meeting.

As for Clinton, having imposed tariffs it is completely within his nature 
to talk from both sides of his mouth and make a public declaration on the 
US's commitment to "free trade".

The Prime Minister will not voice any disagreement with other aspects of US 
policy  such as its aggression against Yugoslavia or its interference in 
the affairs of other countries. US bases in Australia will be just as 
secure as before. The long-term US political, economic and military 
policies will stay and receive the unquestioning support of the Australian 

The US action against Australian exports, however, only goes to show once 
again that when the chips are down, the US looks after its own interests 
irrespective of alliances, international agreements and what might have 
been said or promised on other occasions.

Mark Vaile, Howard's Minister for Trade, has joined the chorus with a 
lecture to others about "catching up with Australia" and demands that 
others grant "greater market access for our producers".

The use of tariffs, subsidies and other protective mechanisms such as 
quotas, are typical methods used by capitalist economies to regulate trade 
and protect domestic industries. All of these methods result in raising 
prices to the consumer but they can be used to defend jobs.

"Free trade" is being strongly pushed by the big corporations because it 
permits them to undercut domestic manufacturers or growers, to drive them 
out of business or take them over. "Free trade" is really anarchy and the 
law of the jungle by which the stronger drive all others to the wall and 
into bankruptcy, and workers workers are left on the scrap heap.

A struggle between "free trade" and "protectionism" has waxed and waned in 
Australia for the whole of the present century. One of the early political 
parties in Australia went by the name of "Free Trade" and won over 35 per 
cent of the vote in the 1901 elections.

The alternative to these methods of trade is the adoption of the principle 
of "mutual benefit". "Mutual benefit" trade means that the buying and 
selling of goods between countries is carried on with an eye to the benefit 
of both countries  not just one. It means the widespread use of trade 
agreements which set out the terms and conditions and quantities of goods 
to be bought and sold. It introduces a planned approach to trade and 
industry development.

It involves the public ownership of major trading organisations so that the 
national interest can be effectively protected while taking into account 
the interests of a trade partner.

There is another important aspect to the Howard Government's response to 
the US tariffs. The PM immediately announced that the Government would 
compensate lamb producers for the losses that they might incur. An amount 
of $5-10 million has been promised to compensate for the impact of US 
tariffs  expected to cause an income loss of up to 10 per cent of the 
$100 million market.

Compare the alacrity with which the Government compensates lamb producers 
who stand to lose up to ten per cent of their income, with the absolute 
neglect of the workers who have been thrown out of work by employers and 
stand to lose all of their entitlements.

An estimated $30 million is owed to workers recently thrown out of their 
jobs. There are no promises for them from the Howard Government and, so 
far, no legislation has been produced by the Government to force employers 
to provide for such circumstances.

Some of these workers will receive absolutely nothing because the employing 
companies or the "labour hire" outfits used have been "asset stripped", 
leaving nothing. This out and out robbery has no priority as far as the 
Howard Government is concerned.
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