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United States and Australia Sign Free Trade Agreement

May 18, 2004

WASHINGTON – U.S. Trade Representative Robert B. Zoellick and
Australian Minister of Trade Mark Vaile signed a landmark Free Trade Agreement (FTA)
today that will eliminate more than 99 percent of manufactured goods tariffs between the two
countries from day one, open services and agricultural markets, and further deepen their
already strong economic ties.

“There is a hard-headed economic reality that supports this free
trade agreement. More than 99% of the manufactured goods traded between the United States and
Australia will be duty- free on the first day this ‘Manufacturing FTA’ goes into effect,” said
Zoellick. “This is the most significant immediate reduction of industrial tariffs ever
achieved in a U.S. free trade agreement.

“As a result of this new freedom, trade between our nations is
projected to rise by billions of dollars, creating more economic opportunity in both the United
States and Australia. We are proud of this state-of-the-art agreement. In addition to freeing
trade in industrial goods, the new FTA removes barriers to agricultural products, investment,
government procurement, and services while increasing protection for intellectual property and
freeing electronic commerce. Millions of Americans and Australians depend on vibrant and
growing trade for their jobs. The U.S-Australia FTA will only add to that number,” continued

“I want to thank the many members of the staffs of the various
agencies in both governments, who have worked virtually around the clock to ready this agreement
for signing,” said Zoellick. “I would like to particularly thank my colleague and friend,
Minister Mark Vaile, whose steadfast determination and hard work helped ensure that we could
reach this long-awaited day.”

Zoellick concluded by stating “Much of this long race remains to
be run. In both the United States and Australia, we must now turn our attention to winning
approval of the agreement from our respective legislatures. In the United States, we are here
today only because Congress passed Trade Promotion Authority in 2002, and because so many members of
the Senate and the House of both parties have offered us unflinching support. I am pleased
that some of these key Members of Congress are here with us today, in particular
Representatives Cal Dooley and Jennifer Dunn.”

Negotiations began in March 2003, and President George W. Bush and
Prime Minister John Howard made it a priority for both countries to conclude the
agreement. The negotiations were concluded on February 8, 2004. Since then the two sides have been
working together to prepare the final text, a 1,300 page document. U.S. Secretary of Agric
ulture, Ann M. Veneman, was also in attendance.

On February 13, 2004, the President notified Congress of his
intent to enter into the U.S.- Australia FTA. Under the Trade Act of 2002, the earliest date the
agreement could be signed is Friday, May 14. The May 18 signing date between the trade
ministers is the earliest possible date to move forward in consultations with the respective legislative

The U.S.-Australia FTA is the first FTA between the United States
and a developed country since the U.S.-Canada Free Trade Agreement in 1988. It is a
21st century, state-of-the-art agreement that reflects the modern globalized economy, opening
markets and streamlining mutual access in intellectual property, services, government
procurement, e-commerce and investment.

Australia is a large and growing trade and investment partner of
the United States, and in 2003 was America’s 14th largest export market for goods. Two-way goods
and services trade is nearly $29 billion, a 53-percent increase since 1994. Two-way foreign
direct investment is about $61 billion. Australia purchases more goods from the United States
than they do from any other country, and the United States enjoys a bilateral goods and
services trade surplus of $9 billion. Australia is a key export market for important U.S. manufacturing
sectors such as aircraft, autos and auto parts, machinery, computers and electronic products,
chemicals, and wood and paper products. Each of the 50 U.S. states exports to Australia, and
Australia is among the top 25 export destinations for 48 of the 50 states. The leading states
exporting to Australia are Washington, California, Illinois, Texas, Michigan, New York, Ohio,
Pennsylvania, and Florida.

The signing, before over 500 people, took place in the Andrew W.
Mellon Auditorium, a building which ranks among the finest example of classic
architecture in the U.S. and is listed on the National Registry of Historic Places.


The United States is working to open markets globally in the Doha
World Trade Organization (WTO) negotiations; regionally through APEC and the Free Trade
Area (FTAA) of the Americas negotiations; and bilaterally, with FTAs.

The U.S. has completed FTAs with eight countries - Costa Rica, the
Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Australia and Morocco -
over the past six months. New and pending FTA partners, taken together, would constitute
America’s third largest export market and the sixth largest economy in the world.

Last month the United States and Panama conducted their first
round of free trade negotiations, and FTA negotiations with Colombia, Ecuador and Peru began this
week. Negotiations are under way with Bahrain and with the five nations of the Southern
African Customs Union (SACU), and negotiations with Thailand are expected to begin

The United States currently has FTAs with Israel, Canada and
Mexico (NAFTA), Jordan, Chile and Singapore.

For further information, see the full text of the agreement and the fact sheet.