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Wednesday, 23 March 1994
Page: 2069

Senator GARETH EVANS —Yesterday Senator Boswell asked me a question about the peace clause negotiated in the Uruguay Round. I have circulated a copy of the answer. I seek leave to incorporate the question and answer in Hansard.

  Leave granted.

  The document read as follows

Senator Boswell asked the Minister for Foreign Affairs, on 22 March 1994:

(1)Does the so-called peace clause prevent Australia from challenging unfair trade practices by the US or the EU, such as subsidised exports into traditional Australian markets, for the six-year duration of the Round or for a period of nine years?

(2)Has the peace clause effectively exempted the common agricultural policy from international challenge until the year 2003?

Senator Evans—The answer to the honourable senator's question is as follows:

The peace clause does not prevent Australia from challenging the unfair agricultural practices of the US and the EU where they are outside the reduction commitments of the Uruguay Round.

The peace clause does not absolve the common agricultural policy from international scrutiny and challenge since the agricultural agreement in the Uruguay Round requires a major reduction by the EU in its levels of agricultural support.

I am advised that the peace clause was part of the Blair House Accord between the US and the EU and basically provided the EU with assurances that if it met its Uruguay Round agricultural commitments in respect of domestic and export subsidies it would be free of GATT action in respect of those subsidies.

The essential elements of the peace accord were subsequently written into the agreement on agriculture as part of the Uruguay Round. It does not prevent countries such as Australia from taking countervailing duty action when threatened by trade distorting domestic and export subsidies. The `peace clause' in the agreement on agriculture has a duration of nine years.

The agricultural package provides for a major reduction over the next six years in the level of production and export subsidies by the EU and the US. This is a major achievement and something we have been striving for without much success over the past thirty years. For the first time agriculture will be subject to international disciplines and the trade distorting effects of rampant subsidisation will be progressively reduced.

Officers from my department will be able to provide Senator Boswell with more detail on this and other issues relating to the Round if required at a briefing later this week which has been arranged by my colleague, Senator McMullan, following his earlier discussions on the Uruguay Round with Senator Boswell.