Truss welcomes new Cairns Group Proposals on Food Aid and Export Credits

Australian Government Minister for Trade, Warren Truss, has welcomed agreement by the Cairns Group of agricultural exporters on two new negotiating proposals on Food Aid and Export Credits in the agriculture negotiations on the World Trade Organization (WTO) Doha Round.

Mr Truss said these issues are being discussed as part of the export subsidy component of the Doha negotiations.

“The rules proposed by the Cairns Group on food aid are to ensure that there are no barriers to the provision of emergency food aid, while also preventing surplus product being dumped on world markets,” Mr Truss said.

“On export credits, the aim is to better discipline programs where overly-generous government preferential financing can amount to an export subsidy.

“These Cairns Group proposals will provide significant benefit to Australian agricultural producers of products like wheat, other grains and dairy. These industries have first-hand experience of the trade-distorting effects of agricultural products being dumped on world markets in the guise of food aid or through overly-generous provisions in export credit programs.”

Mr Truss said the abuse of food aid and export credit programs, particularly by some of the major subsidising, developed countries like the United States, has long been a concern of the Cairns Group.

“I am pleased that the Food Aid proposal carefully ensures that there is no impediment to the provision of food aid in a genuine emergency situation. Under the Cairns Group proposal, there is no requirement to wait – even for one day – in an emergency situation where delays can mean the difference between life and death.

“In non-emergency situations, a number of simple criteria should be met - including a demonstrated need; that aid is in fully grant form; that the provision of aid is not tied to commercial exports from the donating country; and that food aid fully takes into account local market conditions in the recipient country.”

Mr Truss said the export credits proposal limits repayment terms to 180 days.

“Longer periods which are used by some WTO members can give an unfair advantage over other agricultural exporters. The proposal also includes tighter disciplines on payments of interest, minimum interest rates, minimum premium requirements, and other elements which can constitute subsidies or otherwise distort trade.

“These proposals are another important contribution by the Cairns Group to move the negotiations forward. The Group remains fully committed to a successful Doha outcome which will be of major benefit to international trade in agriculture,” Mr Truss said.

Media Inquiries: Minister Truss' office 02 6277 7420 - Departmental Media Liaison 02 6261 1555