Aussie misery over man from Missouri. GEPHARDT'S IOWA WIN

To many here, Richard Gephardt stands for trade protectionism - and his strong showing in Iowa spells trouble. ``We find ourselves in the odd position of rooting for a Republican. Somebody like George Bush. Although I would not choose to be marooned on a deserted island with him, his [trade] policy is more reasonable than the Democrats,'' says Gordon Bilney, the ``left of center'' chairman of the Senate foreign affairs committee.

Seldom in Australia has a US presidential election attracted so much attention, so soon. Missouri Representative Gephardt's progress is ready fodder for corridor banter in Canberra - albeit much of it derogatory.

The protectionist rhetoric coming out of the US sticks in the craw of both liberals and conservatives here. Australian soldiers fought alongside Americans in Vietnam, Korea, and during both World Wars. And Australia has important (US-Australian) military communication and electronic surveillance installations on its soil.

``Yeah. We're first-class allies, second-class friends,'' wryly notes a senior official in the Ministry of Foreign Affairs and Trade.

While Australia is one of the few countries with which the US enjoys a trade surplus (by a two to one margin) it finds itself caught in the crossfire of the US feud with other trading partners.

Australia competes with the US in wheat, coal, and beef sales in particular. Australians don't gripe about competing on a level playing field. But trade barriers, special bilateral agreements, and agricultural subsidies aimed at correcting trade imbalances between the US, Japan, and Europe are cutting the Australians out of markets crucial to their economy.

For example, they complain that US- subsidized wheat is driving down world market prices, further damaging Australia's balance of trade.

``Our farmers can't compete with the US treasury or the EC [European Community] treasury,'' John Kerin, minister for primary industries and energy, complains.

Of particular concern here is how the US improves its trade deficit with Japan, Australia's No. 1 trading partner. Trade officials worry Japan will mollify the US with a sweetheart deal that gives US cattle farmers special access to Japanese markets - and further cuts Australia's share of the market. Already, Australia claims its share of the Japanese beef market has slipped from more than 60 percent to about 50 percent due to redirected Japanese purchases.

``If the US entered into free trade agreements with Canada, Mexico, and Japan, that would absolutely devastate us,'' says Mr. Kerin.

Australians argue that bilateral trade deals, like the recent US-Canadian free trade agreement, are not the best solution. Rather, they'd like to see trade problems resolved multilaterally at the next round of General Agreement on Trade and Tariffs (GATT) talks in Uruguay.

Australian trade officials cringe at Gephardt's suggestions of sanctions or barriers to Japanese products. ``If the Japanese can't export to the US, that pushes them toward a recession,'' says a senior official. And, inevitably, he says, Japan would buy less Australian coal, nickel, and aluminum for its factories.

Government officials here resolutely oppose using the joint military facilities at Nurrungar and Pine Gap as a bargaining chip in trade discussions with the US.

The Nurrungar station receives data from satellites that can monitor intercontinental ballistic missile (ICBMs) launches and nuclear explosions in the Soviet Union and China. Pine Gap, considered one of the US's most important overseas facilities, collects data from movable spy satellites. Both are cited as crucial to verifying arms control compliance.

Still, a senior trade official says despite government determination to keep the defense issues separate, ``over time, people are going to find it hard to understand why such a good ally can treat us this way.''

Indeed, angry farmers here raised the joint facilities issue last year when the US enacted more agricultural subsidies.

Minister for Trade Negotiations Michael Duffy also suggests an indirect impact of protectionism on US military interests in the region. Australia is the largest cash purchaser of US military equipment ($1.1 billion [Australian; US$780 million] in 1986-87), he points out. And if the crossfire of protectionist measures hit Australia ``our capacity to buy defense equipment would be sorely tested,'' Duffy says.

Australia sympathizes with US efforts to open up Japan's markets. But officials argue the solution does not lie in short- term fixes such as tariffs, quotas, or sanctions. Rather, the US needs to bring its ``twin [trade and federal] deficits'' under control, an Australian official says.

Monitor correspondent Gary Thatcher contributed to this article.

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