AWB fallout continues

A couple of side issues have arisen in the last week with regard to the AWB, kickbacks, trade and all that.

US Agricultural Secretary Mike Johanns has told Australia that it must “belly up to the bar” and be prepared to end the “market distorting” single desk monopoly of the Australian Wheat Board (AWB). Mr Johanns is quoted as saying:

Whether it was the wheat board in Canada or Australia or a single desk approach in New Zealand, there was probably going to be a point during the negotiations where we said: “If you want our subsidies down, fine. We are happy to make that happen but we have to have market access and you have to contribute.” ... There are many that would argue that the Australian Wheat Board is a form of trade distortion and therefore a form of subsidy. It’s certainly a monopoly.

Tough talk indeed from Mr Johanns. Hopefully Australia’s trade representatives will talk equally tough, when they point out the assymetry between Australia’s subsidy-lite approach, in contrast to the US’s blatant and copious subsidising of much of its agricultural sector.

Meanwhile another trading-with-the-enemy embarrassment has been uncovered among documents scrutinised by the Cole Inquiry.

A Queensland company has been investigated by Australian Federal Police over fears that a 100-kilogram medical drug shipment was diverted to Iraq and possibly turned into nerve gas.

Documents show that in late 2002, as Australia geared up to support the US-led invasion to destroy Saddam Hussein’s alleged stockpile of weapons of mass destruction, the federal police questioned Alkaloids of Australia about a shipment of the anti-spasm drug hyoscine sent to the Syrian pharmaceutical company Ibn Hayan in 2001.

I did say “embarrassment”, as there doesn’t appear to be anything particularly implying deliberate wrongdoing on the part of the company. And apparently the material in question was as likely to be used in “tablets for stomach complaints” as anything more sinister.

This matter does, however, give an indication of just how fraught is the concept of “dual use” in administering trade and related sanctions.