Freer Trade Down Under
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
The Bush tax cuts that have gotten all the attention are the ones on income taxes, estate taxes, and dividend taxes. But there are another set of Bush tax cuts that are a much less noticed, but nonetheless significant achievement — the expansion of free trade through new free-trade agreements. The U.S. trade representative, Robert Zoellick, has been energetically negotiating to lower foreign tariffs on American goods and at the same time lower American tariffs on foreign goods. In recent months, Mr. Zoellick announced that a deal has been reached with Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua for a U.S.-Central America Free Trade Agreement. And this week, news came of a free-trade agreement reached between America and Australia.
New York state exported $577 million worth of goods to Australia in 2000, according to the U.S. Commerce Department. We also import plenty of Australian goods, as anyone sipping Australian wine while wearing a sweater knit of Australian wool can attest.
“This comprehensive FTA between Australia and the United States strengthens our close ties and offers new potential by expanding opportunities for the workers, businesses, consumers, and farmers of both countries,” Mr. Zoellick said Monday. “This is the most significant immediate cut in industrial tariffs ever achieved in a free-trade agreement, and manufacturers are the big winners.”
We’d amend Mr. Zoellick’s statement to say that manufacturers aren’t the only big winners. Consumers also win big, because lower tariffs mean lower prices for consumers.
This agreement isn’t perfect. American beef duties will have an 18-year phaseout, which strikes us as ridiculously long. The agreement doesn’t change American dairy quotas, which mean higher milk and cheese prices for American consumers. Senator Grassley, a Republican who chairs the Senate Finance Committee, is upset about the ban on reimportation of pharmaceuticals. So it’s a misnomer to call this a U.S.-Australia free-trade agreement. It’s a freer-trade agreement. But that’s a step in the right direction. If the Republican-controlled Congress moves to ratify the trade agreements before the election, the members will have another accomplishment to tout during the campaign season.
