Friday, December 17, 2004

How to Kill a Country

Written by Linda Weiss, Elizabeth Thurbon and John Mathews, professors and lecturers on the subject, this is a thankfully short read. Sorry, I know that this is a very important subject, but economics is not my forte. Reading about the Australian Chicken Meat Federation is not exactly my idea of a good time.

The title is meant to be an alarm bell and wake us all from our collective snooze on the FTA. Despite what the Howard government tells us, that the FTA will be an all round bonanza, the authors of this book maintain that the long term effects of the FTA will be disastrous for Australia.

Most economic modeling says the FTA will provide a negligible increase in our national income. For this increase, there are many disconcerting trade-offs.

If anyone remembers the stand-off between Latham and Howard on the FTA, you will know the most contentious part of the FTA is the provision for the setting up of a body allowing the US to question new drugs being listen on our pharmaceutical benefits scheme (PBS). This could mean that the PBS becomes overloaded with new drugs, of questionable value, thereby making the whole PBS more and more unsustainable. Currently it is funded by our taxes.

Why our government would even allow a clause that opens the door to foreign challenges over what could be listed on our own PBS is beyond belief. I don't know why the entire section wasn't just scrapped. Obviously the US pharmaceutical companies are hoping to get something out of it - more money from us.

Even US specialists in the area warn of the negative effects on Australia. The book quotes Kevin Outterson, law professor at the University of West Virginia:

'Australia got nothing on the pharmaceutical's exclusively to the United States' benefit.......Australia has lower prices and a more functional and complete system than anyone else and that's exactly why the drug companies want to shut it down, because it is such an outstanding model......the FTA is designed to gum up the works on a very efficient, thoughtful system, that many of us wish we could import to the US...I am troubled by US trade representitives utilising the FTA to attack it just when our own domestic states are beginning to evaluate it and possibly embrace it. The real cost will become evident three to four to five years out and at that time it will be too late.......The FTA will be firmly ensconced.'

So there you go. The Americans are even looking to start following our model.

Other worries are the changes to our quarantine laws. At the moment we have a competitive edge on other countries because of our pest and disease free exports. This will change under the FTA, allowing for the risk of diseases like fireblight entering the country.

There's really been hardly any sustained debate on the FTA. Anyone who opposed it was deemed anti-American. Mark Latham had so much pressure on him to pass it or otherwise be accused of being anti-American. What ridiculous arguments.

Of course when ten years down the track drug prices go sky high we'll all be wondering what the hell happened.

The book also features a web site at

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