Words must turn into action on free trade
Craig Emerson's excellent speech leading the directionless Gillard Government toward a new free trade revolution are welcome words, but only if he can get his colleagues to act.
Emerson wants to put free trade at the centre of driving economic growth through unilateral trade liberalisation, concluding the Doha round of multilateral negotiations, only accepting comprehensive free trade agreements.
But even before the openly protectionist Bob Katter and the Greens Party's joined the Parliament's circle of power Emerson's position is out-of-step with his own colleagues who've squibbed at living up to the Hawke/Keating trade liberalisation legacy.
For starters under Emerson's term as competition and consumer affairs minister the Rudd government kept import restrictions on copyrighted books.
Reportedly Emerson fought hard for the reforms backed up with recommendations from the Productivity Commission showing the prices of books would drop and wouldn't diminish Labor's luvvie arts constituency's copyright royalties.
But he was rolled by his colleagues who were more interested in promoting the interests of multinational book publishing houses than the interests of millions of Australian readers who could have had book prices slashed by up to a third.
At least Emerson tried.
He's going to have to pick up his game to drive further reform.
He should start with Labor's election policy to introduce new trade regulations on imports to help stop illegally logged timber entering the country.
Based on the Government's commissioned independent advice the policy would cost more than it is worth because "Australia's imports account for about 0.034 per cent of global timber production, and 0.34 per cent of products incorporating illegally logged timber."
Strongly pushed by industry vested interests the policy isn't going away and last week the department advised industry stakeholders that legislation to impose the new regulatory costs on the timber industry would be introduced "as soon as possible".
Then Emerson would have to take care of Industry Minister, Kim Carr, who spent most of the Rudd government introducing subsidies to offset tariff cuts for the automotive and textile, clothing and footwear industries.
Since the election his news release webpage reads of taxpayer research and subsidy handout to just about every industry who's bothered to send delegations to his office door.
Even health has become the basis for protectionism. COAG's food labelling review is looking at whether imported palm oil should be separately labelled from vegetable oils by bi-national food labelling regulator Food Standards Australia New Zealand.
Such a regulation would invoke a dispute with Indonesia and Malaysia in the World Trade Organisation for breaching the labelling standards of Codex Alimentarius.
Similarly a WTO dispute will almost certainly result from the planned stripping of trademarks from tobacco products.
Emerson then needs to address the ignorance of free trade's benefits that pervade inside the government.
Last month reports from confirmed the Department of Finance wants lost tariff revenue to be factored into considerations of negotiating free trade agreements.
But the whole point of free trade agreements is to remove trade barriers such as tariffs to make the market more competitive.
The benefits of free trade are dynamic and result from the decisions of millions of individuals in the marketplace, not the rise or fall of government tariff revenue.
By factoring lost government revenue negotiations will deliver the "empty vessels engraved with the words free trade agreement" on it that Emerson has advocated he wants to avoid.
At least Emerson is aware of the problem he faces admitting that his colleagues advised that being a self-described "economic rationalist... amounted to an overly long political suicide note," especially amongst the unions who have given birth to many of Labor's protectionist urges.
Last month former head of the Australian Manufacturing Workers Union and NSW Labor Senator, Doug Cameron, voiced loudly he's a "cynic" on the deliverables from FTAs.
And there's some justification for his cynicism.
The Productivity Commission's review into Australia's FTAs raises concerns about burdensome rules and some undesirable obligations.
But unlike Cameron, the Commission's report criticises the government-to-government agreements, not free trade itself.
And the Howard and Rudd governments never used the implementation of FTAs to their full potential treating them as an end unto themselves.
Instead they should act as a foundation, and Emerson could play a constructive role in using them to deepen trade relationships.
Emerson started his speech hoping "for Australia and the World, 2011 can be the Year of Trade". And with his bold free trade leadership it could be.
But considering the shaky ground that Australia's free trade consensus now rests advocates should wish Emerson the best of luck with his colleagues. He's going to need it.