DFAT Joint Press: Australia call for Dismantling of US Export Subsidy Program Minister for Primary Industries and Energy, Senator Bob Collins

Minister for Trade, Senator Bob McMullan

MT117

30 July 1995

AUSTRALIAN SUBMISSION CALLS FOR DISMANTLING OF U.S. EXPORT SUBSIDY PROGRAM

The Australian Government has made a detailed submission to the United States on future options for changing the operation of the Export Enhancement Program (EEP) and the Dairy Export Incentive Program (DEIP) under consideration by the Administration.

The Minister for Trade, Senator McMullan, and the Minister for Primary Industries and Energy, Senator Collins, said the Australian submission to the US Administration, presented on 26 July, was developed following close consultation with Australian industry, in particular through the joint Government and industry Farm Bill Working Group.

The Ministers said the Australian Government submission set out strongly and clearly Australia's fundamental opposition to export subsidies and our concern with the current operation of the EEP and DEIP. The submission spells out what Australia believes should be the key principles of any changes made to the EEP and DEIP.

Senator McMullan said that Australia's concerns with the EEP and DEIP and the possible options for change were a central subject of his discussions last week in Washington with US Trade Representative Kantor, Agriculture Secretary Glickman and other key Administration figures.

The submission makes the point that record world agricultural prices, the restraint being exercised by the EU on using export subsidies and the growing demand for agricultural products in Asia Pacific meant there was no commercial reason for the US to continue to use export subsidies.

During recent visits to Washington both Ministers emphasised in their discussions that the current market situation provided an important opportunity for the US to wind back its exports subsidy programs.

The Australian submission states that the US export subsidies are inefficient and ineffective in increasing sustainable exports and non-subsidising countries such as Australia are harshly and unfairly affected by the export subsidy program of the US.

Through the submission the Ministers argue that if the US is committed to EEP and DEIP any new arrangements should not extend export subsidies to new markets, they should maintain bonuses at minimum levels and take into account the interests of non-subsidisers like Australia.

The Ministers said the possible options put forward for change to the EEP and DEIP by the Administration did not appear to offer any significant improvement on the existing damaging programs and importantly did not appear to measure up to the key principles the Australian Government considered essential in the operation of any new export subsidy scheme by the US.

The Australian submission emphasised that any changes must be consistent with the Uruguay Round commitments of the US.

The US is expected to take some time to determine its position on any possible changes to the administration of the EEP and DEIP, with a decision possibly around October.

Senator McMullan and Senator Collins said the Government will continue to make representations to the US to protect the interests of Australian farmers.

Australian industry bodies as part of the coordinated approach with the Government on possible changes to EEP and DEIP are also making submissions and representations.

For more information Steve Gartland 06 277 7420 / 018 482 887

Brian Johnstone 06 2777520