Trade Minister disappointed with US export subsidies

Trade Minister Tim Groser today expressed his disappointment at the US Administration's decision on 22 May, to reintroduce export subsidies on dairy products.

"Dairy farmers the world over are under pressure, but this is a short-sighted response when the international dairy market has recently been showing signs of stabilising. The decision is a setback, and will be damaging to world markets.

"Export subsidy assistance will have a relatively small effect on income for US dairy farmers, and may even prove counterproductive by creating uncertainty and depressing international dairy market prices. Unsubsidised producers, like those from New Zealand, will bear the cost of these trade-distorting measures.

"I am disappointed that the United States should have followed the poor example set by the European Union when it reintroduced export subsidies in January.

"While the US and the EU may consider they are both acting within their current WTO commitments, this sends a very negative signal to other WTO members.

"Whether these measures are legal or not, misses the point. As the world trading system struggles to counter its greatest downturn in decades, there is enormous scope for increased protectionist measures, even ones which may be WTO consistent.

"In the current international economic environment the EU and the United States, are hardly setting a good example.

"The long term solution is clear: we need to complete the WTO Doha Round in order to secure the elimination of agricultural export subsidies. In the meantime, restraint is needed, not a resumption of retaliatory subsidisation.

"The United States and the EU could still fix this. I hope to meet with US Trade Representative, Ron Kirk, and US Secretary of Agriculture, Tom Vilsack, at the Cairns Group Ministerial meeting in Bali in early June to discuss this, and wider trade issues," said Mr Groser.