DES MOINES (DTN)--Ahead of the important WTO trade-reform talks in Mexico in September, the U.S. and Australia will meet in Hawaii this month to see if they can agree on a bilateral free trade agreement (FTA).
Much of the focus is likely to be on agriculture.
Australia's lead negotiator, Stephen Deady, sees agriculture as the key to successful completion of an FTA between the two countries.
And agriculture is seen as key to completing the world trade-reform talks under the World Trade Organization.
Agriculture was also key when world trade-reform talks ended in 1994 after seven years of negotiating. The current talks, called the Doha Round, have been underway for about two years.
In a speech reported by the Dow Jones news service, Deady wouldn't reveal details of Australia's 23 "chapters" to be presented in Hawaii on July 21, but he did say that Australian farm access to U.S. markets is a top priority.
"The fact is we need improved access for sugar, for dairy, for beef, for Australian agriculture," Deady told a business meeting. "Sugar is front and center in our minds as we approach the negotiations with the United States."
"Unless there is a big market access package out of these negotiations then I don't think we will be successful with our efforts to achieve an FTA with the United States," he added.
Other issues include agricultural quarantine, sanitary and phyto- sanitary measures, standards, technical barriers to trade, rules of origin, remedies, safeguards, anti-dumping and countervailing measures, and customs cooperation.
The two countries are also likely to discuss non-agricultural issues such as services trade, investment rules, competition policy, intellectual property and dispute settlement mechanisms.
The Hawaii meeting will be the third since March between the two countries.
"We are entering the critical phase of the negotiations," said Deady. "This will be the first opportunity to sit down and start talking hard market access with the United States."
Deady explained that earlier meetings were about setting the architecture, the broad framework of the agreement.
He emphasized that Australia needs a "substantial market access package out of these negotiations" to moderate and improve on the "significant quantitative restrictions" in the U.S. for Australian sugar, dairy and beef products.
The beleaguered Australian sugar industry is near desperate in its need to access the highly lucrative, highly protected sugar market.
"They are a key priority for the government," he said.
Deady also expects both nations to restate and recommit to science-based sanitary and phyto-sanitary measures, an area that some feel could be a sticking point in the talks.
Indeed a more detailed and consultative process in this area was approved last year and already underway, he said.
Deady noted that free-trade agreements already struck by the U.S. can have transition periods for market access, which can be quite long, depending on the sensitivity of the product.
In the case of the U.S. agreement with Chile, the longest phase-in period is 12 years, but at the end of that period all Chilean exports to the U.S. face zero tariffs, he said.
"We're not buying onto that 12 year-period, we're not buying onto" the package that Chile negotiated, which is their business, he said.
"It's something we're prepared to talk about with the United States," he said.
With an eye on the vocal, protectionist U.S. farm lobby, Deady said "we are realistic about what the traffic will bear in these things."
U.S. President George W. Bush and Australian prime mnister John Howard met at Bush's Texas ranch in May and committed to completing the trade negotiations this year.
"It's a very ambitious timeline," said Deady.
But he warned that the timeline isn't the driver for Australia--it is a substantial outcome to the overall agreement.
Deady also said any free trade agreement with the U.S. "significantly complements" Australia's push to reform trade in multilateral forums, such as the 145 member nation World Trade Organization.
Australia is a member of the 15-nation Cairns group that claims not to use agricultural subsidies. Australia continually beats the drum in the WTO and other forums for cuts in production and export subsidies, and improved market access, particularly for farm products, notes Dow Jones.
The next big Doha Round negotiations take place in Cancun, Mexico in September.