US urged to drop dairy export subsidies

28 Nov, 2009 01:00 AM
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IT'S one down, and one to go in the thorny world of dairy export subsidies, with the Government vowing to increase its pressure on the United States to follow the lead of Europe and drop its export support.

After a concerted campaign from countries like Australia and New Zealand, and a rise in world dairy prices, the European Union announced it would end its damaging subsidies, brought in from January to help buffer its dairy sector during the financial crisis and a depressed global market for milk.

The US program for dairy export subsidies and its incentive program were reinstated in May 2009, and have been extended until June next year.

More than 100 bids have been accepted since the program was reintroduced in May, but for very small amounts.

Trade Minister Simon Crean and Agriculture Minister Tony Burke issued a joint statement following the decision on the weekend and said the move was good news for Australian dairy producers and another sign that protectionist measures were being wound back.

But they said the US now has "no excuse" to continue with its program.

Mr Crean said that in the wake of the European announcement he would now be making stronger representations to the US administration to fall into line and stop its dairy export subsidies, which he's previously labelled "protectionist".

It will also be raised in Geneva when ministers convene for trade talks later this week.

"I have instructed the Australian Embassy in Washington to raise our objections," Mr Crean said.

"More specifically, Australia wants an assurance that no further bids under the Dairy Export Incentive Program will be accepted by the US Department of Agriculture.

"I intend to personally raise the issue of on-going dairy subsidies with the US Trade Representative Ron Kirk this week in Geneva when I see him.

"In Geneva, I will also be maintaining pressure on the Europeans not to revert to the use of export subsidies for dairy in the future

"The pressure is now on the US to follow the lead of the European Union.

"The last time we raised this issue with the US, their excuse was that they were doing it in response to the Europeans. That excuse no longer exists. There is no excuse."

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