AUSTRALIA AND CHILE CONCLUDE FTA

					  UNCLAS CANBERRA 000554 
 
SENSITIVE 
SIPDIS 
 
STATE PLEASE PASS USTR; STATE FOR EEB, EAP/ANP, WHA 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECON AS CI
SUBJECT: AUSTRALIA AND CHILE CONCLUDE FTA 
 
 
					

1. (U) Summary: Australia and Chile have concluded
negotiations for an FTA. It is expected to be signed in
July. This is the first FTA to be concluded by the Rudd
Government; negotiations began under the previous Howard
government. End summary.



2. (U) On May 27 Trade Minister Simon Crean announced that
Australia and Chile have concluded negotiations on a free
trade agreement. Crean, who has been critical of the former
Howard Government's policy of favoring bilateral FTAs over
the multilateral approach, stressed this is a "high-quality
agreement" covering goods, services, and investment, that
exceeds Australia's and Chile's WTO commitments. (In turn,
the opposition noted that they launched the talks and did a
significant part of the negotiations on the Chile FTA before
the Rudd Government won office last November.)



3. (U) Crean added he would continue to champion strong
FTAs, and that this deal disproved the opposition's claims
that the Rudd Government has "taken its eye off the trade
agenda." Crean also added a dig against the Howard
Government for "selling out Australian agriculture to pursue
an FTA at any cost" - for example, excluding sugar from the
US-Australia FTA and giving the US an 18-year phase-in for
improvement in access for imports of Australian beef and
dairy products.



4. (U) Chile is Australia's third-largest trade partner in
Latin America, with two-way trade exceeding US$800
million/year. Australian FDI in Chile totals around US$3
billion, making it the fourth largest foreign investor in
Chile.



5. (U) Department of Foreign Affairs and Trade contacts
expect the agreement will be signed by the end of July, and
it would enter into force on January 1, 2009. Post will
follow up with a more detailed analysis of the FTA.



6. (SBU) Comment: Crean trade adviser Sophie Ward stressed
to us Crean's commitment to quality FTAs; it appears the
Chile one fits the bill. She also acknowledged that this was
a relatively easy one, since Chile wanted the FTA and like
Australia, has already concluded quality FTAs with the United
States. FTA talks with Japan and China has been much more
difficult. End comment.

MCCALLUM