A Paradigm Shift: The Effect of the 2002 Farm Bill on a US-Australia Free Trade Agreement

Abstract

The passage of the 2002 Farm Bill greatly reduced the likelihood of the US and Australia reaching a Free Trade Agreement (FTA) in the near future. Major issues, such as potential effects on third parties and agriculture, existed before the 2002 Farm Bill, but the passage of the 2002 Farm Bill saw new issues arise and further complicated the issue of agriculture. It created policies, such as large subsidies, that would be difficult to resolve in bilateral trade negotiations between the two countries. The 2002 Farm Bill also symbolized that the US was unwilling to liberalize its agriculture markets, making it difficult for the US to lead any agriculture liberalization talks. It highlighted the difficulties of aligning domestic policy with international policy, and brought to light the difficulty of dealing with structural problems in the US as well as the competing US power structures. The 2002 Farm Bill also showed that interest groups would play a major role in US-Australia FTA discussions. The 2002 Farm Bill not only created and highlighted issues that must be addressed in a US-Australia FTA discussion, but it also changed the manner in which possible US-Australia FTA discussions must be viewed.