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Australian concern at EC decision to increase subsidies on dairy exports

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No. MT88 Date: 22 October 1992 • /


The Australian Government has expressed its concern about a recent decision of the European Community to increase export subsidies on select dairy products of export interest to Australia.

The Acting Minister for Trade and Overseas Development, Neal Blewett, today described both the timing of the EC's announcement and its impact on world prices as regrettable.

"The decision comes at a time when factors in the market such as appreciation of the SUS were moving in favour of EC exporters," Dr Blewett said.

"I am concerned at the potential damage the decision poses to Australian dairy exporters and the industry as a whole."

Dr Blewett said that Australia had already registered its concerns with the European Community in Brussels and that he had written to the EC Commissioner for External Relations, Mr Frans Andriessen, to express the Government's serious concern about this decision.

The Minister for Trade and Overseas Development, John Kerin, currently overseas, would also be taking this matter up with Mr Andriessen.

Dr Blewett noted that in some areas of dairy production the EC remained the predominant price-setter in the world market. This meant that any move by it to significantly increase export refunds could seriously undermine market confidence.

The Minister said that Australian officials would be closely monitoring world prices to ensure that prices for butter and butter oil were not driven below the minimum prices established under the GATT International Dairy Arrangement. Officials have also been asked to raise this matter in that forum when it next meets.