Fine print threatens Howard's trade deal

By GREG ANSLEY in Canberra

Australian Prime Minister John Howard, already facing collapsing support in the polls, will have an uphill battle to sell the free trade agreement with the United States and get it intact through Parliament.

Public support for the deal has been lukewarm since it became clear that sugar was excluded, agriculture got far less than promised, and doubts remained over the effect on the Pharmaceutical Benefits Scheme, which provides cheap medications.

After the release of 1000 pages of the agreement's detail this week, Opposition parties hardened their positions, warning that if their fears were confirmed by the fine print, they would combine to block enabling legislation in the Senate.

Parliament cannot kill the agreement in its entirety, but Labor and minor parties could combine to vote down essential parts that do need approval, creating problems for the Government.

These problems would not be confined to Washington and the free trade agreement.

Howard faces an election this year and if the Opposition parties' concerns were confirmed by a parliamentary inquiry, the Government would have to argue its case in the heat of a campaign that recent polls suggest Labor is already leading.

The most sensitive problem for Howard is the detail surrounding the Pharmaceutical Benefits Scheme and suggestions that a new review mechanism could give opportunities to US drug companies excluded from listing under the scheme.

When the agreement was announced, Canberra said the scheme had not been compromised.

But after the release of the detail, consumer groups and Opposition parties said previously unreported concessions would push prices up.

"If there is anything in the agreement that undermines the PBS, Labor will sink the deal," the party's trade spokesman, Stephen Conroy, said.

The Government was also hit with claims that the agreement would protect US textile manufacturers from Australian competition, and that beef and horticulture would be subject to conditions beyond the previously reported 18-year phase-in of free trade.