Australian farmers and manufacturers will benefit from a nine-nation free trade deal that leaders hope to have in place within a year.
US President Barack Obama, Prime Minister Julia Gillard and the heads of seven other Asia-Pacific nations have agreed on the broad outline of a Trans-Pacific Partnership.
Mr Obama hailed it as a "milestone" that could dwarf the euro-zone.
It commits Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the US and Vietnam to drop all trade barriers.
There's a good side and a bad side to this. Australian politicians have been looking for some time now to create an Asian Pacific bloc similar to the EU. In 2003, for instance, a senate committee issued a report which:
proposes a Pacific community which will eventually have one currency, one labour market, common strong budgetary and fiscal discipline, democratic and ethical governance, shared defence and security arrangements, common laws and resolve in fighting crime, and, health, welfare, education and environmental goals.
In other words, the Australian senate agreed to shift sovereignty toward a regional federation. There was to be "one labour market" in this new federal entity, meaning no borders between Australia, PNG and other pacific nations.
Fortunately the Pacific Community never took off, but Kevin Rudd did bring in a Pacific Islander guest worker scheme in 2008. This scheme was opposed by Brendan Nelson which brought him the following rebuke from the national political correspondent for the Herald Sun:
A guest worker scheme makes sense ... it should also pave the way for a pan-Pacific economic and trade pact ... Rudd's employment scheme, which will initially allow 2500 "guest workers" into Australia, is the first tranche of an eventual Pacific "common market".
And so he we are a few years later, a step closer to a Pacific common market. The good news is that the nations involved in this Pacific free trade pact are so geographically diverse that it will be harder to argue for an EU style federation. The bad news is that these free trade pacts can easily lead on to a "free movement of labour" - which would mean a further loss of border controls for Australia.
Finally, it's worth noting that the Australian Department of Immigration has been proved correct in its warnings about a guest worker scheme back in 2008. It noted the negative impact of the mass recruitment of overseas labor in countries such as the USA and the UK. One problem noted by the departmental researchers was that:
... As immigration has increased, native-born low-skilled workers (those most directly affected by foreign-labor programs) are increasingly dropping out of the labor force, and the tendency seems most pronounced among teenagers.
If you've been reading the Daily Mail recently you'll know what a problem that has become in the UK. Jobs there are increasingly going to overseas applicants, leaving a large pool of native born young people unemployed. The problem has been recognised by the UK Prime Minister, David Cameron who has warned that:
...around two-thirds of the increase in employment since 1997, was accounted for by foreign-born workers. Even now people are managing to come to the UK and find a job. Yet throughout all of those years we consistently had between 4 and 5 million people on out of work benefits. You can understand it from the employer's point of view. Confronted by a failing welfare system, shortcomings in our education system and an open door immigration system they can choose between a disillusioned and demotivated person on benefits here in the UK or an Eastern European with the get up and go to come across a continent to find work. Or they can choose between an inexperienced school leaver here or someone five years older coming to Britain with the experience they need. But that situation is simply not good enough. We have to change things.
Open borders means that a nation doesn't have to confront failings in its education and welfare systems, as workers can be taken from overseas. But keeping 5 million locals on welfare is a costly business and the recent riots in the UK also show the dangers of a large class of unemployed young people.
The question, then, is whether this new nine nation agreement can be kept to a free trade pact (which is how it's now being presented to the public) or whether it will lead on to a free movement in labour or, worse, an attempt to create an EU style regional federation.
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