Smokin' Mirrors: The Cheers Weekly Political Column

Hello and welcome to the political column of Cheers Magazine. I'm Willie, and I would like to thank Cheers for allowing me to do what every reporter would love to: write about politics. That is, unless you want to write about fashion. No offence to the fashionistas out there!

For the first column, I am going to enter the deep, insidious world of kickbacks and quelled inquiries. Yes, folks, we're talking about the AWB: the Australian Wheat Board.

The AWB is accused of funnelling AUD300 million of kickbacks to the regime of Saddam Hussein via a Jordanian trucking company.

While the upper management of the AWB has been going through the mill of an official inquiry, it wasn’t until most of them had claimed no knowledge that an AWB Market report on Iraq was brought before the Cole Inquiry, which stated:

"Inland transport fees are paid via Alia in Jordon, which then pays the Ministry of Transport in Iraq."

But wait. There's more.

The man who brought the report to the inquiry, Regional Marketing Manager Chris Whitwell, also said that the report was "just a few mouse clicks away" from senior AWB management desks, and was also sent on to the Australian Federal Government Wheat Board. He also stated that the payments had UN approval.

The AWB is what is known as a 'single desk' agency for all of the wheat exported out of Australia. It's common knowledge that US and EU farmers intensely dislike the very idea of the AWB. The most important reason for this is that the single desk could be deemed a 'barrier to trade'. There are many who would like to see the single desk in the Australian wheat industry go, and they are making this scandal their prime excuse for it.

First, though, let's take a look at what a barrier to trade actually is. Under the rules of the World Trade Organisation, what is deemed to be a barrier to trade has changed vastly since the good old days of import/export levies. These days, they can include labour laws, local media content laws, environmental protection laws -- in fact, the intensely secret Dispute Settlement Process (DSP) in the WTO, where disputes of this kind are settled, has, with only one exception, declared illegal every environmental or public health law brought before it to date.

The 2006 report from the Global Trade Watch group says that FTAs "can override domestic laws and regulations, limiting what policies countries can implement or maintain, it can overrule that country's laws, and force the country to comply using trade sanctions."

Essentially what this means is that just about anything can be a barrier to trade, and this is just how US farmers view Australia's single desk system. The AWB pools all wheat to be exported and acts as the only seller for this wheat. Up until recently it was under government control, but then, ironically, it was privatised.

So now one private company holds a monopoly on all of Australia's wheat exports, and they are joining the Deputy Prime Minister of Australia, Mark Vaille (who was the Minister for Trade during the time of the alleged kickbacks), in a rush trip to Baghdad to see if they can salvage their lucrative wheat contract. It seems the Iraqi Grain Board has a slight problem with the possibility that Australia funnelled millions of dollars into Saddam's coffers, and suspended all wheat trading with them.

Now, some might say that the US has a point: if one company holds a monopoly on wheat exports, it's unfair in the global trading world. They get better deals, better contracts. But let us not forget -- both US and EU farmers receive massive subsidies every year from their governments, without which most growers could not survive. Subsidies are also -- yep, you guessed it -- a barrier to trade, so perhaps the US farmers need to decide which is more worth their while -- receiving subsidies or dismantling a desk.

One thing is for sure. This thing ain't over yet. The implications of a country, at war as an ally with the US to topple the very same regime it has been paying (almost as much money to as the Australian wheat farmers earned for growing the stuff)...well, it's mind boggling, really. It will be well worth keeping an eye on the Cole Inquiry to see which heads will roll. And heads will roll.

For more information on the AWB scandal, try these websites:

ABC News (Australia): http://www.abc.net.au/rural/news/content/2006/s1572384.htm

Dateline, SBS Australia: A Grain of Truth
Click here

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