I’ve now worked through the backlog of AFR opinion pieces. The most recent one to be posted is A deal not in our interest from 30 January 2003, dealing with the proposed Free Trade Agreement between Australia and the US. The main point is

On the Australian side, there are hardly any traditional barriers left to remove. We still have tariffs on textiles, clothing, footwear and motor vehicles, but these industries are just as beleaguered in the US as they are here, and any impact on trade will be small.

What, then, does the US want from us? One issue stressed by Trade Representative Robert Zoellick is ‘intellectual property’. To see what this might mean in practice, we need to look at the case of Eldred vs Ashcroft, decided recently by the US Supreme Court.

This case was a constitutional challenge to a recent Act of Congress which extended the term of copyright protection from fifty years after the death of the author to seventy years (ninety-five for corporations). The ‘Copyright Term Extension Act’ is often referred to as the ‘Mickey Mouse Act’ because of the observation that the term of copyright is extended whenever the Disney copyright on Mickey is about to lapse.

The constitutional challenge failed, but the case did elicit an unusual degree of interest from American economists , seventeen of whom submitted a brief to the Supreme Court opposing the Act. The list is striking not only because of the eminence of the signatories (five Nobel Prizes and more to come) but because it represents all shades of economic opinion from free-market luminaries like Buchanan, Coase and Friedman to interventionists like Akerlof and Arrow.

Australia still has the term of copyright fixed at fifty years after the author’s death and publishers interested in making public-domain works accessible to the general public are increasingly taking advantage of this. There can be little doubt that the negotiating demands of the US in any agreement will include an extension of our copyright terms.

Jason Soon commented on this piece when it came out, referring to me and Kim Weatherall (who shares these concerns)as ‘Cassandras of academe’. As I’m sure Jason is aware, Cassandra was subject to the curse that her prophecies would be always right and always ignored.

Update Scott Wickstein responds, arguing that bad copyright laws would be a small price to pay for “20 years worth easy access to US markets for our farmers? ” On the implausible assumption that the US will in fact offer this, he may be right. But Scott’s argument reinforces my main point, which is in the opening para of the article

Advocates of agreements for freer trade have had an easy run in Australia in recent decades. In much of the world, such agreements are seen as a form of barter – we give up our trade barriers in return for you giving up yours. By contrast, standard trade theory tells us that, as a general rule, we benefit from reducing our trade barriers regardless of what other countries do.

In this case, as Scott concedes, we are essentially engaged in barter. Fine if we get a good deal, but on past experience of US-Australia agreements, I doubt it. Ken Parish who’s moved yet again (making the shift to MT that I only talk about), has more useful discussion on this.