Bush Visits Australia In Difficult Times

WHEN President Bush arrives in Australia on New Year's Eve he will feel right at home: Australia, like the United States, is struggling to emerge from a recession.The new prime minister, Paul Keating, hopes that falling interest rates will spark his economy - just as the Federal Reserve Board is pushing interest rates down in the US. (Bush seeks US jobs boost in Asia, Page 3.) And Mr. Bush can't help noting that Mr. Keating's Australian Labor Party (ALP), like the Republican Party, is facing some tough political times. On Dec. 19, the ALP unseated as party leader Prime Minister Bob Hawke, who had won four elections in his eight years in office. The ALP was reacting to Mr. Hawke's low standings in the polls and a feeling he had run out of steam. This shift in political leadership will change the tenor of Bush's visit. Instead of playing golf with his old mate Hawke on New Year's Day, Bush will meet with Keating at Kirribilli House, the prime minister's Sydney residence, for an extra one-on-one session. "The US will be taking an interest in what the Keating government's priorities are going to be," says the University of Tasmania's Richard Herr. On Friday, Keating shuffled his Cabinet and named John Dawkins the fourth treasurer in six months. Reflecting the uncertainty, the Australian dollar has been battered against all currencies in the last three weeks. Against this economic and political low tide, both leaders will meet here and in Canberra, the capital, to talk about trade issues, defense policy, and Australia's possible contribution to helping the new Commonwealth of Independent States. Mr. Herr says the two leaders are likely to exchange views on the growing cohesiveness of the Asia-Pacific region. Bush will address a joint session of Parliament and will meet with the leader of the opposition, John Hewson, who is far ahead in the race for the next election in 1993. Bush is also likely to thank Australia for its contribution to the Gulf war effort. Finally, he will meet with business leaders in Melbourne as part of his push to increase US exports and attract new investment in the US. Probably the most important issue will be developing a common response to the deadlocked trade negotiations under the General Agreement on Tariffs and Trade (GATT). Australia is a member of the Cairns Group, which advocates ending export subsidies and backs free access for all agricultural commodities.

Allied against subsidies The US, which supports most of the Cairns Group positions, is trying to convince the European Community to end its extensive program of export subsidies. The GATT talks are adjourned until Jan. 13, when the Europeans are supposed to respond to a proposal for agricultural reform put forward by Arthur Dunkel, director-general of GATT. The Bush visit - the first presidential tour since President Johnson's trip in 1967 - will also give Australians a chance to complain to Bush directly about US farm policy, which likewise provides export subsidies for US agricultural products. The National Farmers Federation estimates the US Export Enhancement Program (EEP) cost Australian farmers $760 million, or $30 per ton for last year's wheat crop. "We have a simple message: The EEP is destroying Australian farmers," says Graham Blight, president of the Farmers Federation and part of a three-man delegation that will meet Bush Thursday.

Wheat is the core Mr. Blight plans to explain to Bush that wheat is the core crop of Australian agriculture. If farmers receive a decent price for their wheat, they don't worry about their wool harvest. "There is a clear follow-on effect to other commodities," Blight says. The social costs can be seen by thousands of farmers taking their children out of school to save money on transportation. The farm problems, says Blight, "are eating away at the social structure." The farmers also plan to present Bush with a page from a petition with thousands of signatures asking for the US to end farm export subsidies. And, to be sure Bush gets the message, the farm organizations are encouraging their members to drive to Canberra to demonstrate outside Parliament House. Immediately after meeting with Bush, Blight plans to address the farmers gathered outside.

Important for relations Richard Baker, an analyst at the East-West Center in Honolulu, believes this meeting is important to US-Australian relations. "If the farmers say, 'We met with the president and he genuinely understands what Australian farmers are going through, and he is looking forward to the end of the EEP,' then the reaction will be favorable," says Mr. Baker. However, he adds, "If Bush refuses to listen, then the farmers are going to say America is stabbing them in the back." Bush will be pressed hard by the farmers. Blight will also complain about US subsidies of rice to Jordan at a time when the US is short of rice to meet traditional customers. He will complain about restraints on the export of beef, sugar, and poppy seeds (for medicinal use) to the US. And he will ask Bush to reduce or eliminate the duty on greasy (unprocessed) wool. "We're not the enemy; we are supposed to be friends," says Blight.