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Tuesday, 9 December 1986
Page: 3654

(Question No. 1398)

Senator Jones asked the Minister representing the Minister for Trade, upon notice, on 25 September 1986:

(1) What measures or options are available to the Australian Government, in view of the continuing and crippling trade marketing practices being conducted by the United States and the European Community in the field of agriculture to combat such practices.

(2) What measures does the Australian Government envisage against the government of the United States and the member countries of the EC, unless the present marketing techniques being employed by both groups against each other and in particular against the interests of Australia and its primary producers, are stopped.

Senator Button —The Minister for Trade has provided the following answer to the honourable senator's question:

There is limited direct or effective leverage which Australia could apply with a view to bringing about fundamental changes in US and EC agricultural support and trade policies, which are the root cause of the aggressive subsidisation practices they are both employing in the hope of expanding their shares of world trade for their surpluses of major agricultural products. The present crisis in world agricultural trade is in large measure due to the lack of effective GATT rules affecting the agricultural sector, the refusal of sovereign governments to negotiate to liberalise trade in agriculture and, hence, to moderate the excesses of their domestic agricultural support and trade protectionist regimes.

Over many years Australia has followed a firm policy of making strong representations to foreign governments on all issues likely to have detrimental consequences for our agricultural trade and has used the GATT processes to the fullest possible extent to defend our agricultural trade interests. This activity has been intensified over the last two years first by strengthening our representation at the GATT and in key overseas capitals and by escalating the frequency, strength and level of our formal representations to other governments on specific trade issues. Whenever a suitable opportunity or particular need has arisen to do so, I and other Ministers have put Australia's views and requests forcefully to other Governments. The Prime Minister has also taken up these matters personally with President Reagan and President Delors. In the last two years top priority has been given to our concerns about various aspects of the United States Food Security Act (1985) and the continuing slow pace of developments in the European Communities on reform of the Common Agricultural Policy.

In our preparations for, and during, the recent Punta del Este Ministerial meeting of GATT contracting parties, the Government has taken strong initiatives to ensure that these same issues will be addressed as priority concerns in the new round of Multilateral Trade Negotiations. For example Australia was responsible for arrangements which resulted in the formation of the CAIRNS Group of fair traders in agriculture. At the Cairns Ministerial Meeting in August 1986 Ministers (or their representatives) from Australia, Argentina, Brazil, Canada, Chile, Colombia, Fiji, Hungary, Indonesia, Malaysia, the Philippines, New Zealand, Thailand and Uruguay emphasised that the new round of Multilateral Trade Negotiations must address agricultural trade issues as a high priority; that there must be a serious and genuine attempt to seek the removal of market access barriers, substantial reductions in agricultural subsidies and the elimination of export subsidies; and that additional efforts were needed to secure early changes in the domestic farm support policies of those countries whose policies adversely affect international agricultural trade.

The solidarity of the Cairns Group was a major factor in the successful launch of the new GATT round by the Ministerial meeting in Punta del Este in September. For the first time, agriculture will be dealt with comprehensively in the Round and all forms of subsidies affecting agricultural trade will be subject to negotiation. The strength of small and medium-sized agricultural exporters acting in concert has been clearly established and will be drawn on, as appropriate, in working for effective trade reform and for a better deal for farmers in efficient countries like Australia.

In order to maintain the momentum for reform evident at Punta del Este, the Government has proposed that major agricultural subsidising nations freeze the levels of their subsidies affecting agricultural trade to establish a solid basis for international negotiations on agriculture. The EC has been receptive to this idea and the Government intends to urge the US Administration to join in this effort.

Our immediate objective remains the creation of focused pressure on the majors for early progress on agriculture in the MTNs. We do not expect the cease fire to be a solution to the broad set of agricultural trade problems but, if it is in place, it should be easier to negotiate a framework for broader, more lasting solutions. To generate further support for the ceasefire, we intend to take follow-up action, for example, in the OECD, in the preparation for and discussions at the Taupo (NZ) meeting of trade ministers in March, and in the Cairns Group.

We also intend to continue to press ahead with organising or supporting research into the production and trade policies of the majors, quantifying protection levels and assessing trade distortions and costs (both domestic and international) associated with subsidies and restrictions on access to markets. This type of work is potentially relevant in influencing attitudes to farm support in subsidising countries and in mobilising international pressure for more liberalised agriculture trade.

The Government's basic aim remains to rollback subsidies (and phase out agricultural export subsidies) and to improve access to markets.