4 October 1995
The US Administration announced the interim allocations overnight. During this interim period - October to December - the Administration is reviewing options for the future operation of the programs and is expected to make a decision later in the year.
The Ministers said they were pleased the US had heeded Australia's requests not to include new markets in the allocations. However, they remain very concerned about the damaging effect of the subsidies, specifically the significant proportionate increase in subsidies on dairy products, in the growing Asia-Pacific markets.
"We are particularly disappointed that the US has just announced increased skim milk powder allocations to markets in Asia when its own stocks are low and world prices are high," the Ministers said.
"As we have been doing for some time, we will call upon the US to dismantle export subsidies, in keeping with the liberalising spirit of the Uruguay Round outcomes.
"Over the last three months, both the US and the EU have actually suspended the payment of allocated subsidies, given the record high prices in world markets.
"The US and the EU should both take the opportunity of this situation to resist any temptation to make subsidy payments."
In fact, just this week, following remarks by a senior US official publicly advocating a more aggressive use of export subsidies, the Ministers wrote jointly to US Trade Representative, Mickey Kantor, and USDA Secretary, Dan Glickman, over any such moves by the US. The Ministers said that, in any future consideration of export subsidies beyond the interim period, the US should consider the views of their own agricultural organisations.
"Recent American reports have demonstrated that export subsidy programs are undercutting US export competitiveness."
Commenting on EEP, the influential American Farmland Trust said:
- the program is "...an anachronism in the new post-NAFTA, post-GATT environment"
- and "...virtually all evidence suggests that the program has purchased very little in the way of net additions to export volume - at a very high cost to the US taxpayer".
The Ministers said these reports confirm that the programs are hurting American taxpayers but, more importantly, EEP and DEIP have the potential to steal markets from Australian farmers, force down prices and cost the jobs of many Australians.
"The Government will continue to work closely and vigorously with Australian industry, particularly in our work on influencing the 1995 US Farm Bill, to ensure Australia's interests in Asia-Pacific markets are not undermined by unfair and wasteful US export subsidies."
Further information:
Senator McMullan's office: John Flannery, (06) 277 7420
Senator Collins' office: Shaun Drabsch, (06) 277 7520