FASTS: Beware Australia's Free Trade Agreement with the US; the Path May Contain Hidden Crevasses . (June 15, 2004)

     The President of Federation of Australian Scientific and Technological Societies (FASTS), Snow Barlow, said today, "There is a real threat the Free Trade Agreement will result in jobs, production, R&D capacity and export opportunities being taken offshore. The problem is the FTA significantly reduces the capacity of the Government to exercise control of foreign takeovers or apply conditions that will deliver benefits to Australia."

    Professor Barlow pointed particularly to two provisions which appear detrimental to Australian interests saying that first of all the FTA prevents the Government making technology transfer and domestic content requirements a condition of investment in firms that grow out of publicly funded R&D grants and subsidies, and second, the raising of the investment threshold from $50m to $800m for manufacturing firms means the Foreign Investment Review Board (FIRB) might be bypassed in regard to proposed takeovers of the vast bulk of R&D intensive, small, medium enterprises (SMEs).

    If in fact the FTA overrides the requirement of technology transfer and domestic content requirements as a condition of R&D grants it would seriously constrain the existing "national benefits test" for industry R&D programs including R&D Start and Commercialising Emerging Technology (COMET).
    It could also adversely constrain the capacity of a future Government to implement "national benefits" criteria to other publicly-funded R&D programs such as the ARC, Universities and NHMRC.

And Professor Barlow's outspoken conclusion:

Clearly, the FTA is not consistent with a key focus of Backing Australia's Ability to maximise the capacity of Australian small and medium-sized businesses to take innovative ideas to the market.

FASTS' full submission to the Senate Free Trade Agreement inquiry is available.