Department of Foreign Affairs and Trade

Trade Minister, Mark Vaile, has welcomed a negotiating proposal submitted in Geneva by the Cairns Group to address agricultural market concerns including high tariffs on processed foods.

The proposal calls for the elimination of tariff escalation, whereby tariffs increase as food products are processed, which reduces the scope for Australian processed food exports to major developed markets.

It also seeks tighter rules on export restrictions and taxes to address food security concerns in developing countries.

The proposal will be discussed at the next session of the World Trade Organisation agriculture negotiations in Geneva on 5-7 February.

"This latest Cairns Group proposal complements the proposals the group submitted in 2000 for increased market access and the elimination of export subsidies," Mr Vaile said.

"Imposing higher tariffs on products as they change from raw materials to processed food discourages exporting countries, including Australia, from developing their food processing industries," he said.

"This proposal also addresses the concerns that food importing countries have expressed about the use of export restrictions or taxes, either as a political response or to ease short term supply shortages in producing countries, by restricting imports.

"We believe tighter rules on export restrictions and taxes should go hand in hand with the removal of tariff barriers.  Eliminating escalating tariffs would promote processed food industries, reduce the pressure for export restrictions and contribute greatly to future food security.

"The agriculture negotiations are now entering their second year.  In 2001, the Cairns Group will continue to push for substantial reform of trade barriers, in ways that bring real benefits to Australia's rural industries," Mr Vaile said.

Contact:
James Baker (Ministerial) 02 6277 7420
Nicole Guihot (Departmental) 02 6261 1555

MVT4/2001