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Wednesday, 11 November 1964


Senator HENTY - The answer to the honorable senator's question is as follows - 1 and 2. As indicated in the reply to the earlier question asked by Senator Murphy, a number of countries rely on subsidies to expand their exports. Indeed there are very few primary products entering world trade which are not subsidised to some extent by one exporter or another although the commodities mainly concerned are wheat, flour, and dairy products. The use of subsidies has an effect on the price at which trade takes place and Australia has undoubtedly been disadvantaged in this respect. In some cases particular contracts have been lost by Australia to other exporting countries because of the competitive edge given to those exporters through subsidies. It is not. possible to isolate the effects of subsidies from the variety of factors which affect international trade and therefore the exact extent of damage suffered by Australia cannot be stated exactly.

3.   The question of export subsidies and similar devices, employed by a number of European countries to assist the export of surplus agricultural products, particularly flour, has been the subject of intensive international consideration. Australia and other agricultural exporters have made persistent attempts to strengthen provisions of the General Agreement on Tariffs and Trade in regard to export subsidies on primary products. Despite some improvements which have been secured, the G.A.T.T. provisions remain unsatisfactory. Nevertheless, Australia some years ago brought the matter of French export subsidies on wheat and flour to the attention of G.A.T.T. and, as a result of the findings of the G.A.T.T. in this matter, France concluded a bilateral arrangement with Australia which limited French flour exports to Australia's traditional South East Asian markets. However, the main scope for action by Australia to secure protection against predatory export subsidies has been through bilateral negotiation. Trade agreements or understandings negotiated with the United Kingdom, Japan, Ceylon, the Federation of Malaya, and the Federation of Rhodesia and Nyasaland all included provisions designed to afford Australian commercial exports to those markets reasonable protection against subsidised competition.

In the particular case of butter, 'where volume and the price of Australian exports sales were being seriously affected by dumping and heavy subsidies a solution was found through the negotiation of a special arrangement between the United Kingdom and the. major exporters of butter to the United Kingdom market. This arrangement has proved to be most valuable to Australia and has resulted in butter prices in the United Kingdom market reaching and remaining at remunerative levels.







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