stays in place

Australia’s trade barrier stays in place

The Australian govern ment’s decision on pro tection for the textile, clo thing and footwear (TCF) sector, said the Australian Financial Review, was ’’one of those rare political coups in which just about everyone is happy.”

Just about everyone except Pacific island exporters.

For Fiji, in particular, the news comes as a bitter blow.

Led by the Minister for In dustry, Technology and Com merce Senator John Button, Australia’s cabinet last month adopted a middle road which, though electorally popular in Australia does nothing for the islands.

SPEC had argued hard be fore Australia’s Industries Assistance Commission for free access for the region’s garment manufacturers, currently labouring under an inadequate quota system.

The protectionists in the Aus tralian Cabinet, however, gave a little ground in that the lAC’s top option of 75 per cent protection was eroded to closer to 60 per cent.

But the general tariff level currently 134 per cent will be reduced to 60 per cent only over the next seven years.

The tariff on footwear will fall to 50 per cent.

A proposal by finance minis ter, Senator Walsh, for a move to 50 per cent was defeated.

Forum island countries (FICs) share an Australian mar ket quota of 66,000 units. And with Fiji, Tonga, Western Samoa, Solomon Islands.

Vanuatu and. more recently, Tuvalu all competing for a quota share the market is crowded.

The 50 per cent rule (November PIM page 32) also mitigates against Fiji manu facturers as they become more and more efficient.

Fiji alone exported 150,000 units to Australia in 1985. Last year the figure was expected to reach 300,000. But some lowering of the Australian bar riers will be necessary if the industry is not to stagnate.

It was that which brought Fiji’s development minister Mr Peter Stinson to castigate his much larger neighbour for its import policies.

He told the Fiji Parliament that Fiji’s garment makers could easily fill their quota entitlement in eight or nine days produc tion.

He was, he said, fed up with being told that Fiji should stop whingeing and be satisfied that it was being given a fair deal.

As a close neighbour, he added, Fiji expected better ac cess to the Australian market.

The problem is the Australian electorate. Button has never made it a secret that he consid ers Australia’s TCF sector very over-protected.

I However, as a realist he is aware of the enormous poten tial for political damage in TCF policy making.

The Labor Party need only lose nine seats in the next general election to be in real trouble. Four seats were directly affected by the TCF outcome

hence a heavy preference within the party caucus for the lAC’s top option.

The ’’political coup” was But ton’s ability to persuade them to accept a slightly lower rate of protection.

For island producers, how ever, it doesn’t do a great deal.