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Gatt Council supports Australia's request to examine adverse effects of EC and US grain subsidies



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No. MT79 Date: 30 September 1992

GATT COUNCIL SUPPORTS AUSTRALIA'S REQUEST TO EXAMINE ADVERSE EFFECTS OF EC AND US GRAIN SUBSIDIES

The Minister for Trade and Overseas Development, John Kerin, announced today that Australia has succeeded in its bid to have the GATT Council in Geneva examine the adverse effects of U.S. and EC wheat export subsidies.

At its meeting in Geneva yesterday the GATT Council took up Australia's request that the GATT Council Chairman, Ambassador B.K. Zutshi, discuss and investigate with interested parties avenues of addressing problems arising from export subsidisation of wheat.

"This is a welcome response to our concerns," Mr Kerin said, adding that the Chairman would report back to the Council on the outcome of his discussions which in turn would allow the Council to further consider the matter.

Mr Kerin said that on 4 September Australia had put forward the issue of U.S. and EC wheat export subsidies for discussion on the. GAIT Council agenda.

"Australia's view is that while it is clear that GATT rules in respect of agricultural export subsidies are not as effective as the rules covering export subsidies in other sectors, basic GATT principles extending over all trade and certain provisions relating to agriculture cannot be ignored," he said.

"It is pleasing that a significant number of the GATT's contracting parties have taken this opportunity to voice their concern over the escalation of agricultural export subsidies by major economies.

"Most countries which spoke at yesterday's meeting in Geneva expressed support and sympathy for Australia's position

"These included Japan, the ASEAN members, Korea, Canada, New Zealand, India, Pakitan, Argentina, Chile, Mexico, Brazil, Hungary, Uruguay, El Salvador, Bolivia, Colombo and Cuba.

"This wide-ranging support underlines how seriously the members of the GATT consider the issue, in particular its implications for the Uruguay Round and the credibility of the multilateral trading system.

"We have appealed to the collective conscience of GATT members and they have responded positively.

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"This is clear evidence of the determination of most GATT members to secure

improved rules on agricultural subsidisation, which can only come from a successful conclusion of the Uruguay Round, a need which has been the focus of particular attention by Australia in the negotiations."

Mr Kerin said he found it encouraging that while the U.S. and the EC vigorously defended their subsidy policies, neither had opposed the consensus view of the Council that the Chairman should undertake consultations as a matter of urgency and that there was a role for collective action by the GATT on the issue.

He hoped that the Council Chairman's initiative would help to sensitise subsidising countries to the harmful effects competitive subsidisation was inflicting on non-subsidising exporters such as Australia and provide a stimulus for reducing the incidence and impact of agricultural exports subsidies.