MEDIA RELEASE AUSTRALIAN MINISTER FOR TRADE MARK VAILE
MVT69/99	29 November 1999
Trade Minister Calls for Global Sugar Market Reform

Trade Minister, Mark Vaile, today called on WTO members to reform the global sugar market and commit to removing unfair subsidies and market access barriers that have created instability in world sugar markets.

Mr Vaile was speaking at the Seattle launch of the international Global Alliance for Sugar Trade Reform and Liberalisation where he released a detailed analysis of the world sugar trade titled Sugar - International Policies Affecting Market Expansion.

"The international sugar market is one of the most distorted in the world. Correcting the policy-induced constraints on this market would benefit consumers by almost $US5 billion a year," Mr Vaile said.

"Consumers in the EU would save $US2.2 billion, Japanese consumers $US1 billion and those in the United States $US1.6 billion a year. Liberalising the US market alone would increase returns to world sugar exporters by $1.5 billion a year.

"Clear beneficiaries, as well as consumers, would be efficient sugar producers, many in developing countries, who'd receive better average prices for their sugar."

Through the Alliance, Australia's sugar industry is working with sugar producers from Brazil, Canada, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, India, Nicaragua, Panama and Thailand to ensure that the WTO delivers measurable reform of the sugar market.

"The aim of the Global Alliance is to ensure that sugar producers and consumers receive a fair deal," Mr Vaile said.

Sugar: Policies Affecting Market Expansion, prepared by the Australian Bureau of Agricultural and Resource Economics (ABARE) and Sparks Companies Inc of the United States, highlights the impact current policy induced distortions have on domestic and international sugar markets.

The study reports (on OECD findings) that Japanese sugar producers receive around 60 per cent of their gross incomes from government measures that inflate domestic sugar prices. EU and US government support accounts for around 40 per cent of producer revenues in these countries.

Copies of the ABARE study are available below or by phoning 02 6261 1157.

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New Report: Sugar - International Policies Affecting Market Expansion International agricultural markets are heavily distorted, with sugar being one of the worst affected. Distortions in world sugar trade stem largely from government policies in a small number of countries. The policies pursued in these countries impose substantial economic costs worldwide. Correcting the policy induced distortions of the world's sugar markets would increase global income. Consumers in protected markets would benefit significantly from an effective increase in incomes as a result of having to spend less on their sweetener requirements. Low cost producers, including those in a number of developing countries, would also benefit from receiving undistorted market returns for their sugar. The WTO negotiations on agriculture provide an important opportunity to achieve sugar market reforms that will improve economic welfare of producers and consumers in a range of developed and developing economies.

For further information contact:

Minister's Office - Bruce Mills (02) 6277 7420 Department - Matt Francis (02) 6261 1555