The Heritage Foundation

News Releases on Asia

June 19, 2001

June 19, 2001 | News Releases on Asia

U.S. Should Pursue Closer Relations With Australia, Analyst Says

WASHINGTON, June 19, 2001-America should strengthen its ties with Australia and encourage it to continue its commitment to economic freedom by forging bilateral agreements with Canberra on trade and other issues, a new Heritage Foundation paper says.

Australia, which fought beside the United States in every war over the last century, embodies democratic capitalism as much as almost any country on Earth, say the authors of the paper-Southeast Asia policy analyst Dana Dillon, trade policy analyst Denise Froning and Gerald O'Driscoll, director of Heritage's Center for International Trade and Economics.

Australia ranks ninth among 161 countries in the 2001 "Index of Economic Freedom," published by Heritage and The Wall Street Journal. And, say the analysts, no other country in the Asia-Pacific region more closely matches the United States' political and economic values.

That's why President Bush, who will play host to Australian Prime Minister John Howard on Sept. 10, should push not only for a comprehensive bilateral trade agreement but also for further integration of U.S.-Australian military forces and perhaps even for Australian involvement in America's missile-defense plans.

There are some roadblocks to a comprehensive trade agreement, the analysts say. For instance, both countries restrict foreign investment in some sectors (such as telecommunications) for national security reasons. And the United States would like Australia to continue deregulating its economy, including selling off state-owned enterprises such as Telstra, the national telephone company. But none of these obstacles seem insurmountable, they say.

They add that an open-skies policy-allowing Australian airlines to fly domestic routes in the United States and vice versa-would encourage much-needed competition in both nations' airline industries. Similarly, a U.S. embargo on lamb should end, which would benefit consumers here as well as ranchers in Australia, who would gain access to the U.S. market.

Australia restricts imports of animals and plants that could damage its unique fauna and flora. The United States should respect this, the analysts say, but ensure the restrictions are based on science, not protectionism. And rather than incorporating broad "anti-dumping" measures into a trade agreement, which can stall negotiations, the two countries "should directly tackle issues of unfair trade practices where they exist," they say.

Similarly, few roadblocks exist to establishing closer defense and security ties with this reliable ally. The United States would like Australia to spend more to modernize its equipment-particularly in its navy and air force-to make its forces and weapons more compatible with American ones so the two nations can work together more effectively on the battlefield.

On U.S. missile-defense plans, the analysts note, Australia has been one of the most supportive countries in the world. The Bush administration has yet to determine a direct role for Australia on this crucial issue, but it should do so before September and be ready to present it at that time, they say.

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