Media release

Australian Minister for Trade, Mark Vaile

Friday, July 7, 2000 - EMBARGO 12 NOON
MVT71/2000

Big gains from ag trade liberalisation

Acting-National Party Leader and Trade Minister, Mark Vaile, today welcomed ABARE?s latest report highlighting the big global benefits that would flow from agricultural trade reform.

Mr Vaile said ABARE's study The Impact of Agricultural Trade Liberalisation on Developing Countries clearly showed that substantial benefits would flow to producers and consumers across the world.

"While a net increase in global GDP, estimated at $US53 billion ($A88 billion), from a halving of agricultural support levels would mostly accrue to developed countries ($US39 billion), there would also be substantial gains to developing countries of nearly $US14 billion a year," Mr Vaile said.

"Developing countries would gain from better market access and higher prices. And while food import prices for net agricultural importers would increase, food importing countries would make significant GDP gains as liberalisation improved the efficiency of resource allocation," Mr Vaile said.

Mr Vaile said another key finding was that preferences to specific countries was a very inefficient form of aid-through-trade, and that overall, developing countries would benefit from the axing of preferential access arrangements.

He said although some small countries that were highly dependent on preferences could lose, their losses could be more than offset by redirecting US and EU farm handouts into more effective forms of aid.

Mr Vaile said the study provided solid reasons why developing countries needed to actively fight for trade liberalisation in the World Trade Organisation (WTO).

"Developing countries must unite in the fight for fair trade."

He said officers from his Department would be working with ABARE to spread the results of the study in Cairns Group developing countries during this and next month with the aim of encouraging and strengthening their resolve to join the fight.

Mr Vaile said the study was made possible by the allocation of funds announced by the Prime Minister at the NFF conference at Longreach in May last year.