What’s free about trade?

The collapse of the world negotiations in Geneva last week meant global gains worth $US287 billion ($377billion), including $US86 billion for developing countries, were left stalled for at least another three years.

But in a last-ditch effort to hold on to some gains from the five-year negotiations, Australia will hold an expanded trade meeting in Cairns next month that will be attended by chief US trade negotiator Susan Schwab, US Agriculture Secretary Mike Johanns and World Trade Organisation director-general Pascal Lamy.

The fact is the US push free trade agreements in every direction, historically through bullying and blackmail. But there is rarely anything free about them.

While the US demands other economies strip subsidies and other barriers which create an uneven market they insist on holding onto their own.

A good example is NAFTA, which is endlessly subject to conflict and challenge. Never mind, for example, that the umpires NAFTA itself and WTO both say the US is wrong to impose softwood lumber tariffs on Canada, the stakes are too high to pay more than lip service to free trade.

The irony of that is that US home builders are penalized on cost flow-on and demand shortfalls. The big money doesn’t give a rats arse for the US consumer or their own agreements.

On the failed Doha talks, Australia is proposing a compromise between the US and the EU that would involve Washington cutting its farm subsidies by a further $US5 billion and the EU reducing its tariffs by a further 5 per cent.

So it is not free trade, it is trade as usual, negotiating through the most acceptable set of barriers for all sides.

Australia, who just finalized their US free trade agreement are cut smack in the middle of the big guys here. There aren’t many oil for food schemes come along for Aussie resource and agricultural exporters to rape, and life is hard when you have to play by imposed rules.

The last time the Doha trade liberalisation talks stalled in Seattle it was a meeting of trade ministers in Darwin that restarted the process.

Back in the halcyon days of emergent monetarism, during the ‘80s, exponents of the Ayn Rand dream were fond of chorusing “There is no such thing as a FREE lunch!” I think it is time we should be crying loudly – “There is no such thing as FREE trade!”

It is all about greed, bullying, cohesion and poker. The rest is just bullshit to dress it up for the masses.

Personally I think it would serve the interest of individual nations to return openly to their old protectionist ways rather than continue with this free market sham.

SIDEBAR:

On another issue which has been subject to recent discussion, minimum wages. Here is a bit of a comparison.

A prominent employer group has recommended increasing Australia's minimum wage by $14 a week, breaking ranks with its business rivals and the Howard Government.

The Australian Industry Group, which represents 11,000 manufacturing firms, declared yesterday that $14 - the highest amount it has ever supported - was "fair and responsible" for low-income earners.

The view contrasts with a decision by the federal Government and the Australian Chamber of Commerce and Industry not to nominate a dollar figure for the minimum wage. Under new Howard laws individuals must take disputes to a ‘Fair Wages Commissioner’.

Can you picture the line-up as millions of Australian workers dispute their base wage? A great boost for productivity…