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Thursday, 24 February 1977
Page: 503

Mr Lloyd (MURRAY, VICTORIA) asked the Minister for Overseas Trade on 30 November 1976 the following question, upon notice:

(   1 ) What action does he intend to take to counteract the California State law which establishes an export fund from domestic sales which is used as a freight subsidy for export canned fruit sales.

(2   ) Is this scheme similar to the Market Development Allowance Scheme of the Australian Canned Fruit Industry of several years ago which was successfully challenged by the United States as an export subsidy and contrary to the GATT Agreement.

Mr Anthony - The answer to the honourable member's question is as follows:

(1)   Legislation passed by the Californian Assembly and approved by the Governor on September 22 1976, is designed to promote sales of Californian commodities by a number of means including the use of'reimbursement payments to offset commodity transportation costs to foreign markets'. I understand that to date the provisions of the legislation have not been applied, but that the Californian canning peach industry expects that the necessary procedures to implement the provisions in respect of its products will shortly be initiated.

The Australian Government is very concerned at the possible effects of the legislation, if implemented, on those Australian exports which compete with Californian products in third country markets. Discussions have been held with appropriate U.S. authorities and the matter is being pursued with the new U.S. Federal Administration and with Californian authorities.

(2)   Under the Canned Fruits Excise Act (1963) the Australian Government administered a levy on domestic sales of canned deciduous fruit which the Australian Canned Fruits Board allocated to canneries for export assistance. This arrangement, the so-called Market Development Allowance, was discontinued following U.S. complaints in 1967-68. The Californian scheme is similar in some respects to the MDA.

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