Newton and his partner, world 200-meter sprint champion John Mooney, finished fifth in their 1,000-meter K-2 semifinal. The faster overall fifth place finisher from the two semifinal heats was able to move to the finals but Newton and Mooney were slower than the Australians.
Australia finished in 3:19.056, to 3:19.834 for Newton-Mooney.
Harbold finished seventh in his K-1 1,000-meter semifinals, in 3:44.663.
Harbold, a three-time Olympian, was still in contention for fifth place at 750 meters when Brazil's Sebastian Cuattrin passed him and Harbold fell back.
"I'm pretty disappointed," said Newton, "but I gave it my best shot so there's not much more I could do."
Newton said his boat was battling with the defending gold medalist Germans, the defending bronze medalist Poles and the French (fourth in 1995 world championships) all the way down to 20 meters.
"Then the Swede snuck in and beat us for fourth by two-tenths of a second," said Newton.
He said he will consider returning for the 2000 Olympics in Australia and hopes to be in Hawaii in October for the Molokai-to-Oahu canoe race.
Hawaii's Traci Phillips competes in the women's singles 500-meter semifinals tomorrow.
She lost her opening race yesterday but advanced through the repechage round.