The wisdom of current US trade policy has not passed entirely unchallenged. Some commentators have argued that free trade agreements have hidden political costs insofar as they breed resentment in countries not invited to sign such agreements. Others have demanded that future agreements incorporate higher labour and environmental standards. Left unchallenged, however, is the assumption that current policy promotes good relations with partner countries. It is this assumption that we seek to question, by taking as a case study the Australian reaction to the detailed copyright provisions of the US-Australia free trade agreement. These provisions gave rise to extreme and sustained controversy, so much so that it can fairly be said that the copyright provisions – more than any other single part of the agreement – helped to generate a climate of suspicion and concern about the United States' intentions. As a consequence, far from promoting the United States' political interests, the US-Australia free trade agreement has fed anti-American sentiment in a traditionally friendly country.

Equally importantly, we show that US copyright owners gained little from the agreement: something that is likely to surprise supporters and critics of US copyright policy alike. Consequently our analysis reveals, first, that the conclusion of a free trade agreement may produce net political costs for the US even within partner countries; and second, that these costs are not offset by economic benefits, at least in the copyright sphere. Whilst this does not demonstrate conclusively that the bilateral route needs to be abandoned, it does lend support to the argument that there needs to be a fundamental reassessment of current US trade strategy.