The Department of Foreign Affairs and Trade, Australia

Media Release

19 July 1996 TR 47

JOINT MEDIA RELEASE

DEPUTY PRIME MINISTER AND MINISTER FOR TRADE, TIM FISCHER
AND MINISTER FOR PRIMARY INDUSTRIES AND ENERGY, JOHN ANDERSON

GOVERNMENT DISAPPOINTED AT CONTINUED USE OF US AGRICULTURAL EXPORT SUBSIDIES

Australia's fundamental opposition to US agricultural export subsidy schemes has been reiterated today by the Deputy Prime Minister and Minister for Trade, Tim Fischer and the Minister for Primary Industries and Energy, John Anderson.

The Government' s opposition to the Export Enhancement Program (EEP) and Dairy Export Incentive Program (DEIP) was reinforced following the US Administration's announcement of new annual allocations under the subsidy schemes for the period July 1996 to June 1997.

"We are disappointed the US is maintaining its export subsidy programs even though the Uruguay Round and the newly enacted US Farm Bill have set parameters to limit the use of US agricultural subsidies, and the world markets are buoyant," Mr Fischer said.

Mr Fischer and Mr Anderson expressed concern at the increasing use of regional allocations for EEP and the potential this has to lead to the future targeting of growing Asian markets of importance to Australia.

The Ministers also criticised the fact that DEIP allocations will include two new target markets, Vietnam and South Korea.

Allocations to the Asian region under the DEIP will now be combined with allocations to the former Soviet Union to form a 'super' region, and Mr Fischer said the Government would closely monitor the impact this development may have on Australian exports.

"We are seriously concerned by continuing DEIP allocations to Asia, particularly the increasing bonus awards for skim milk powder over the past year," Mr Anderson said.

"It makes no sense for the US to continue DEIP allocations for skim milk powder which have the effect of destabilising world market prices, especially when its own domestic supply is so diminished."

"Australia supports fair and unsubsidised competition in emerging markets, and we totally reject subsidies which create a negative effect on price expectations and corrupt healthy markets to the long-term detriment of all suppliers," Mr Fischer said.

Mr Fischer added that through the Farm Bill Working Group, the Coalition Government and business will continue to monitor the effect of US export subsidies on Australia and to co-ordinate our strategy to press the US to wind back these trade-distorting mechanisms.

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