Mr CAMERON THOMPSON (2:08 PM) —My question is to the Minister for Agriculture, Fisheries and Forestry. Minister, what is the government's response to the decision of the United States to increase its subsidies to US farmers? What impact will this decision have on Australian farmers?

Mr TRUSS (Minister for Agriculture, Fisheries and Forestry) —I thank the member for Blair for his question. As one who represents many farmers, he would be, like other members of the government, horrified by the announcement that the US Congress have agreed to a new level of subsidies for American farmers totalling $US15.3 billion—that is around $A28 billion. That is a $28 billion subsidy program approved by the United States in an endeavour to further insulate their farmers from the realities of the world market. Once again, it demonstrates the double standards that the United States display when dealing with trade issues. Whilst they are very bold and aggressive in giving advice to the rest of the world, when it comes to their own marketplace they do very little and in fact increase their levels of subsidies. It is of some concern that this new level of congressional support, if signed off by the President, will in fact result in there being actually a higher level of subsidies available to US farmers now than when the original GATT agreement was signed by those opposite a few years ago. The US government lawyers have found ways to get around the system and to manipulate the arrangements so that they can continue to supply very high levels of support.

There are many farmers in Australia who are, naturally, concerned. When they face levels of difficulty and they see people in other parts of the world receiving higher levels of subsidy, they may sometimes ask, `Why can't Australia match those levels of subsidies?' There are a couple of reasons why we cannot. It is obvious, firstly, that Australian taxpayers and the Australian Treasury can never hope to win a subsidy battle with the mighty treasuries of Europe and the United States. But there is another underlying problem, and that is that the GATT agreement signed by Labor specifically gives advantages to the US farmers over Australian farmers. The agreement gives a much higher level of permitted support to US farmers than to Australian farmers. To give you an illustration, the maximum aggregate level of support that is allowed to US farmers under the agreement signed by Labor is the equivalent of $15,227 per farmer—that is allowed under the GATT agreement—whereas, under that same agreement, the maximum level of subsidy that Australia could provide is $4,000. So, under this world trade agreement, US farmers are actually entitled, without us being able to take any action, to subsidy levels four times those that can be provided in Australia.

We will be looking very closely at these latest US measures to check that they do fit within the WTO rules; that what is being done now is legitimate. If they do not, we will take them to the WTO, as we did in the lamb case. We will be mounting solid action if any of these actions are perceived to be outside of the measures that the Labor Party signed off on when the GATT agreement came into being. In the longer term, the Minister for Trade is working hard to get us a better trade deal for the future, but Australian farmers can look well and truly back to the days of Labor to see the level of subsidies that they signed off on to support US farmers.