From down under, a thumbs down to US subsidies. Despite trade friction, Australia premier's trip aims to reaffirm ties

By , Staff writer of The Christian Science Monitor

Australian Prime Minister Bob Hawke comes to the United States to make his case against farm subsidies - and get to know the presidential candidates. The immediate lure for Mr. Hawke, who arrived yesterday, is an invitation to address a joint session of Congress - a first for an Australian prime minister. It's an address which can only help Australia in its perennial trade battle to reduce American farm subsidies.

From the standpoint of correcting trade imbalances between the US, Japan, and Europe, such subsidies may be justified. But Australia - a staunch Pacific ally - tends to get caught in the protectionist crossfire. Australia is a major producer of wheat, beef, and coal.

It's no accident that the effort to reduce agricultural trade barriers at the next round of GATT talks is being spearheaded by Australia. (GATT, the General Agreement on Tariffs and Trade, aims to reduce trade barriers.)

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Of course, if drought conditions persist in the US, in the short term Australia stands to pick up some of the slack in overseas grain sales.

But Hawke's advisors see this as more than a bang-the-trade-drum visit. It comes at an opportune time for Hawke to parley with the presidential candidates and tout Australia's economic potential.

``With the elections looming, we hope to put our views across to both prospective administrations,'' says a Hawke aide. Separate meetings with President Reagan and George Bush will be held Thursday. A meeting with Michael Dukakis is planned.

Hawke has maintained a close relationship - this is his fourth visit - with the Reagan administration throughout his five years as head of the liberal Australian Labor Party (ALP) government.

``Apart for the ever-present trade rows, relations with the United States have been as good as they've ever been with a Labor government. And almost as good as at any period,'' says Dr. Coral Bell, professor of international relations at Australian National University.

So, the trip is also something of a farewell visit to Mr. Reagan as well. In Washington, Hawke will meet with congressional leaders, the secretary of defense, and Secretary of State George Shultz.

From Washington's perspective, staying on good terms with Australia - the military alliance is as firm as ever - is perhaps most important now in verifying compliance with the INF Treaty. There are two jointly operated monitoring facilities in Australia. Pine Gap, considered one of the US's most important overseas facilities, collects data from movable spy satellites. Nurrungar station receives data from satellites on intercontinental-ballistic-missile launches and nuclear explosions in the Soviet Union and China.

While there have been rumblings by farmers here over using these outposts as negotiating chips in trade disputes, the Hawke adminstration has not complied.

Indeed, Bob Hawke's most impassioned speech at the ALP conference earlier this month was in support of the joint facilities. The visit includes stops in Chicago and New York, where Hawke will address investors and business groups.

Currently, the heavily commodities-based Australian economy is reaping the benefits from strong prices for wool, beef, and many minerals. The Australian dollar has risen sharply against other currencies in the eight months since the sharemarket crash. Hawke is likely to note the favorable outlook Australia received in the June 6 Organization for Economic Cooperation and Development annual survey.

And he's likely to expound on Australia's progress on correcting its trade imbalance. Hawke said last week the current-account deficit would shrink to less than 4 percent of gross domestic product this year and less than 3.5 percent in '89.

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