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Export enhancement program - joint parliamentary delegation to the United States

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Please find attached a news release and transcript of the press conference held by the Joint Parliamentary Delegation in Washington on Friday 8 March 1991.

CATHY WALKER 9 March 1991

No. Date: β



Australia ;■· v " - News Release

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The Bush Administration has given an assurance that it will take all possible care to avoid disruption by the Export

Enhancement Program to Australia’s traditional wheat markets, including the Middle East in the post-war period.

The Administration has also agreed to consider a proposal from National Farmers Federation President, John Allwright, to establish a process of consultation with Australia on sales under e e p .

These assurances were given to the Australian bipartisan trade delegation to Washington following two days of meetings with members of the us Congress and representatives of the US


The delegation was lead by the Minister for Trade and Overseas Development, Dr Neal Blewett, and comprised Mr Brian Courtice, HP, Chairman of the Government Taskforce on Rural Issues; Mr Bruce Lloyd, Deputy Leader of the National Party and Shadow Minister for Primary Industry; Mr Alexander Downer, Shadow Minister for Trade and Trade Negotiations; and NFF President, Mr Allwright.

Dx* Blewett said that the delegation had p r o t e s t e d .forcefully and effectively against the wheat subsidies paid to US farmers under the EEP.

MW6 have successfully registered with the Administration and the congress the deep concern of the Australian Parliament and people about the damage being done to our farmers by e e p

subsidies,” he said. .

Dr Blevett said the mission had succeeded in concentrating the minds of both the members of the Congress and officials of the Administration on the unintentional "fall-out” of the EEP for fair trading nations like Australia.

He said that the delegation had argued that:

* the EEP was contributing significantly to the economic hardship of Australian farmers, coating Australian wheat growers up to S174 million in lost’income this year - about $5,000 per farm;

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* Australia vas an innocent victim of the trans-Atlantic trade war, in which the European Community was

undoubtedly the principal villain;

* the damage being done to Australian farmers by the EEP was undermining not only the trade relationship between Australia and the United States, but also our excellent overall relationship. ;

Dr Blevett said that there was a growing fear that the United States might use the EEP in a way that | undercut Australia*e traditional Middle East markets.

Dr slewett said that the delegation had told Republican and Democratic Members of Congress in the House ahd the Senate that the proposal to increase funding for the SEP could do further damage to Australian faimer».

"It was particularly appropriate that they were able to receive this message before the funding Bill is debated,” he said.

”we argued that If the export Enhancement program could not be scrapped altogether, it should be capped to limit its damage, and that it should be better targeted to avoid Australia.”

Dr Blewett said that almost every member of Congress with whom the delegation met had acknowledged that Australia was an innocent victim of the EEP, and that it had been unfairly and unjustly wounded in the trade war.

• ’Nevertheless, it was made clear to us that while ever the European Community continues with Its massive agricultural subsidies, the United States will maintain the Export Enhancement Program.

"In this context, they argued for the Uruguay Round

agricultural negotiations to be successfully concluded and shared our concern for the negotiations to be pursued with urgency.·'

Dr Blewett said that the delegation believed that, on balance, the Congress probably would approve increased EEP funding.

"But our visit to Washington has achieved a much greater recognition of the damage being done by the EEP to Australian farmers. :

'•The assurances given to us about better targeting of the Program do provide some hope that the damage caused to Australian farmers by the e b f can be reduced."

Washington DC; March e, 1991



MARCH 8, 1991

The media conference was held by Dr Neal Blewett, Minister for Trade and Overseas Development; Mr Bruce Lloyd, Deputy Leader of the National Party and Shadow Minister for Prikary industry? Mr Alexander Downer,Shadow Minister for Trade? Mr Brian Courtice,

Chairman of the Government’s Taskforce on Rural Issues; Mr John Allwright, President of the National Farmers’ Federation

MR. BLEWETT; Ladles and gentlemen, In our discussions that we ’ve had with both the Administration and the congress, the Bush Administration has given ue an assurance that it will take all possible care to avoid disruption by the Export Enhancement Program

to Australia’s traditional wheat markets, including the Middle East in the postwar period. The Administration hae also agreed to consider a proposal put forward by John Allwright, the President of the National Farmers' Federation, to establish a consultative mechanism with Australia on sales under the EBP,

Now, the United States has always made it clear to us that it was never the intention to target Australia in any way. The EBP is aimed at particularly the European Community, those countries which subsidize into markets in competition with the united states. It was not their intention to target Australia, which is a leading

nonsuhsidlzer, a leading member or the cairns Group, and we have worked closely with the United States in the Uruguay Round to ensure that the chief source of the corruption of International agricultural trade, that is the European Common Market, is

hopefully going to change Its position on agricultural protection. And we will continue to follow that strategy in alliance with the United States on this agricultural issue.

However, I think we've successfully conveyed to both the Administration and to Congress that, despite the intentions of the United states, there is a deep concern in the Australian parliament and people about the damage being done to our farmers by the EEP

subsidies, we argued with them quite strongly that we preferred that the Export Enhancement Program should go, but, if it couldn't be scrapped, then it should be capped to limit its damage and that it should be much better targeted to avoid Australia.


I've got to say that almost every member of the congress we met with, leading figures from the Agriculture committee ana the Budget Committees, that nearly every congressman we met agreed with us that it had worked unjustly on Australia, that it had damaged

Australia, and they were sympathetic with the problems that it had posed for us. I've also got to say that they argued that they would need to keep that Export Enhancement Program in place until there was change in the position of the Europeans, that it was a necessary tool to lever change out of the Europeans.

That, of course, means that for all of us it is increasingly important that we bring the Uruguay Round to a successful conclusion, and we share with the united states their concern to get momentum back into those Uruguay Round talks. And I believe that the assurance that we've received will go some way to provide some hope that the damage that has been caused to Australian farmers by the EEP can be reduced.

I'd just like to mention that while I've been in Washington, I've also taken the opportunity to talk about the Middle East issues with the United States Corps of Engineers and also with other American companies. I've got to point out that despite some media speculation, there are still many opportunities for Australian business in the Middle East.

MR. LLOYD; Could I say that the fact that there is a bipartisan delegation from Australia indicates the seriousness of the situation that faces our wheat growers with the lowest incomes for many, many years, a comparison of $1.33 US per bushel, compared to almost $4 per bushel for American farmers, wheat growers. The

tact that we are here together — I'tn shadow minister ror primary industry — that in the time available, In a very difficult circumstance, I believe we have achieved the best that was

achievable, the assurances concerning targeting and consultation.

I do want to commend Dr. Blewett, the leader of the delegation for the work he has done, the leadership he has given, and what has been achieved, and also commend Ambassador Cook and the staff here at the Australian Embassy for the arrangements made

for this delegation.

MR. DOWNER: Can I just say that this bipartisan mission, which came out of a proposal from the Federal Opposition and was subsequently taken up by the Prime Minister,; was perhaps launched amidst a certain amount of controversy back in Australia. But the two days that we've been here working together I think have been extraordinarily fruitful In terms of us, as an Australian Parliament, being able to put across a total Australian view, drawing the attention of both the congress and the Administration

to the great oonoerns there are in Australia about the impact of the Export Enhancement Program and the long-term o o n o e m that the impact of that program has on the relationship between Australia

and the United states. And because we're a bipartisan mission, it's been possible, I think, to have a much greater impact in expressing those views to both the congress and the Administration.

I must say, from my point of view, as the Shadow Minister for Trade, I've been quite struck by some aspects of the response that Dr. Blewett did refer at great length to, and that is, in particular, amongst Congressmen that we spoke to, there is a view

that this Export Enhancement Program, whilst as they see it a useful weapon to be used against the European community, is causing, to use a phrase, some collateral damage to fair traders such as Australia. And they accept that this program is, in

essence, an unfair program from our point of view.

So I think in getting that message across, we've certainly established the great value of this sort of mission. And with Mr. Lloyd, I'd like to congratulate Dr. Blewett on the work ha's done here, and the leadership he 1a shown to the delegation. It's a delegation that has worked well. And also, Ambassador Cook and his team have done a quite excellent job in assisting us, as well.

MR. COURTICE; It's pleasing to recognise the understanding that the United States Administration and the Congress and the senate have come to place on our concerns and the recognition that our markets are a concern to us and to minimize any effect of e e p on our traditional markets. And also, or course, it's Important to

emphasize the need to speed up the success or the Uruguay Round and the importance that the Cairns Group is playing in attacking the protective barriers that the EEC have introduced and maintained

over the last decade, and ultimately, all fanners right across the world will benefit as we bring down those trade barriers. And it falls on us to work very hard with the United States to overcome those problems, and work to see a successful conclusion to the Uruguay Round.

MR, ALLWR1GHT: Thank you. I represent the 170,000 farmers in Australia. And we are free enterprise, free market, and, in fact, we work very closely with the American Farm Bureau and my colleague there, Dean Kleckner and I have worked strongly at GATT to try and

get some reform in international trade. And we certainly support our government's initiative both in the GATT Round and being here.

so I'm pleased with the outcome of the discussions we've had. As always, we are treated with enormous courtesy and great generosity of time by the - both the Administration and tho Congress.

it*3 always — * I'm always astounded that they can arrord to give us eo much time and particularly in this occasion on such short notice. I just want to place on record my appreciation for that and I also join with the other members in congratulating our

leader, Minister Blewett, on the manner in which this is being conducted. :

I feel I can go home and say to my farmers, one of the

problems that is confronting you, I believe has been addressed in a rational and I hope a successful manner. And I want to thank the American Administration and Congressmen for the manner in which they’ve addressed the problem. Thank you. !

MR. SWEENEY: We ’d like to take questions now. We have a problem in the shortage of time, we will have to leave shortly after 4:00.

Q I'm Jim Anderson of DPA. Specifically, did you get any assurances that the united States will back out of the Egyptian wheat market? i

Second, comet line ago I heard on a Radio Australia program broadcast in the United states that Ambassador sembler had expressed the view that in gratitude for Australian participation in the coalition forces, that the United States would stay away from traditional Australian wheat markets and agricultural markets in general. Did he make that assurance to you, and do you feel that the Americans have lived up to that assurance?

m r . b l e w e t t ; well, first of all, in relation to the latter part of the question, we have not in any way endeavored to link our discussions with our role in the Gulf War, because we believe that was an international commitment by Australia to a view of

collective security which my government holds very strongly, and that should be quite apart from such issues as the trade issue.

In relation to Egypt, we of course received no specific commitment from the Americans that they would withdraw from that market. What we did, as I say, receive was that there would not be disruption of those markets to our disadvantage.

MR. LLOYD: You will be aware that a significant sale of Australian wheat has just been made to Egypt.

Q I'm sorry, can you just define, for our purposes, what you mean by "disruption"?

MR. BLEWETT: Well, that would seriously undermine Australia'e shares in that market.


q I'm Moses rrom Reuters News service. I just want to

know# what exactly are your markets that you reel uncertain about In relation to the US, specifically speaking?

MR. BLEWETT: Well, of course, our major markets for wheat are now In the Middle East and they Include EgyptL Iran, and of course, in the past, Iraq. Iraq was in fact our single biggest market, but of course since sanctions have been imposed that market has been closed. But those markets now constitute — and of course, some of

the smaller States in the Gulf - constitute the greatest center of interest for Australian wheat exporters. ;

Q Thank you. John Cameron from ABC-TV, Dr. Blewett, I know Ambassador Hills defends the American subsidies as necessary against the Europeans for protection. They're certainly not responsible for any world slump. Do you now have a better understanding or a sympathy for the American system that you might not have had before?

MR. BLEWETT: Oh, I think we've always understood the American position, that they see the Export Enhancement Program ae essentially a device, above all, from Ambassador Carla Hills' position as a form of leverage to try and shift the Europeans, who are of course the chief subsidisers of agriculture in the world

today, to shift them from the rather intransigent position they have held over most of the Uruguay Round.

We understand that role, what we are very much concerned with is that in the trade war, which has accelerated in the last few months between the European Community and the united states, free trading nations such as Australia, but also Argentina is another

example, of countries which have been damaged in the fallout rrom this. As one of the American congressmen admitted, he thought that the Export Enhancement Program was something like a Scud missile, it wasn’t particularly accurate. So that, that's been our major concern.

Q Robert Bolton- ABC Radio. Could you tell me a bit more about this consultative mechanism you spoke of?

MR. BLEWETT: Well, what we've asked is for consultation with the united states about the targeting or plans to target particular markets under their EBP program. And we would like to be involved in consultations. I ’ve got to say, we ’ve already — for instance,

our Barley Board has had very useful consultations about aspects of the use of EEP in relation to barley.

Mow, we would like to see such consultations develop in relation to other commodities, particularly wheat, and the Administration has agreed to consider that request.

Q Would that mechanism In any way immunize the effect of EEP or la It really Just — :

m r . b l e w e t t : What It would do - again, we hope what It would do would be to contribute to the effective targeting, which the Americans claim Is their object under the Export Enhancement Program - that is, targeting against subsidizers like the

Europeans. We gave the example, for instance, of Yemen, which was targeted by the United States though there was no evidence of any significant European Community exports of wheat to that market.

Q Joel Southern with Berns Mews Bureau here in Washington. This is a question relating to the GATT. I'm sure you're aware that there's growing concern and perhaps even opposition to extending fast-track hare in the US, and that has certainly

implications for ratifying a GATT agreement. How concerned are you about that? What are you hearing about it? And from an Australian perspective, what are your concerns?

MR, BLBWETTi We are concerned about some of the problems facing the Administration here in relation to getting the fast traok because the fast track is a necessary requirement of getting the Uruguay Round momentum back in place. It would be very difficult, indeed, to conclude the Uruguay Round successfully if

that fast-track mechanism is not accepted.

I understand that it is partly in some senses an overload problem because the fast track also applies to the Mexican treaty, and therefore, there are concerns in the Administration about getting the fast track through, we certainly In Australia would want to do anything we could to support the passage of the fast

track because we see It to be in the interest not just of world agricultural issues but, of course, the whole international trading system is very dependent on a successful outcome to the Uruguay Round, :

Q Dr. Blewett, Peter Stephens from the Age newspaper. This problem about the united states Export Enhancement program interfering in Australian markets, what Australia regards as its markets is something that has existed now for several years, and

it's something Australia has complained about very loudly for several years. What have you gained on this journey that leads you to believe the situation will be different ih a month or six weeks time than it was a month or six weeks ago?

MR. BLEWSTT: Well, first of all, we never set out with the expectation that we were going to have to secure radical changes in American policy. I've got to eay we've not achieved as much ae ve might have hoped for. :

Almost certainly, we've achieved more than we expected. And that answers the second part of your -- or the first part of your question. That is, these are more explicit assurances than we've had in relation to these matters from the united states before.

I think — and this is a very encouraging feature — talking to the Congress people and talking to the administration, there is really a much greater awareness of the problems that the EEP poses for countries like Australia than on previous occasions. Again, I think that is partly the result of the very close

relationship Australia has had with the United States during the Uruguay Round itself. :

<2 I'm Mary Foley with Knight-Ridder Financial News. I actually have several small questions. ,

Firstly, I understand that the House Agriculture committee in the Congress has passed legislation that would lift the cap on the Export Enhancement Program, and they've just done this within the last week. I wonder, during your meetings on Capitol Hill, did you

receive any assurances from members that perhaps they would put this legislation aside?

A second question would be- , Who did you meet with in the Agriculture Department that gave you these assurances about the new treatment for EEF? And were you given any promises that the US would not put together a food aid package for the Middle Bast in

light of the post-war situation there?

m r . b l e w e t t : Right, well, we're also informed that a b l n yesterday was passed which maintains the cap for the moment. We are aware the Glickman bill is also around, and we did have discussions of that. Zt was to have come up next week, and that was one of our reasons for coming this week, but I now gather it's been postponed for at least another week. And there is a lot of behind-the-scenes activity going on that measure.

We're not aficionados of Congressional practice in this country, but obviously there is a lot of discussion and parlaying going on. I think our expectation would be that it is likely that there will be some increased funds for the Export Enhancement

Program, and we would be disappointed by that, however, as I said, our main emphasis was on targeting. :

As regards the commitments made, primarily they were made by Ambassador Carla Hills from Trade, also from State, and others who gave us these assurances, and we are confident that those assurances will be honored. :

on the last question you asked, we aid: discuss this matter, and as tar as possible, all — or both the United States and

Australia will try and avoid competition or undermining of competition in that area. That doesn’t mean that there may not be situations of humanitarian need in the Middle East in which we both, possibly, may have to make aid contributions.

Q We have a new Agriculture Secretary designate here, Mr. Madigan, and I just wonder, again, from an Australian perspective, Is he somebody that you feel you can work with?

MR. BLEWETT; Well, I've got to say we've not been able to meet Mr. Madigan, because, as you know, yesterday he was confirmed and today he was sworn In, and they were the two days we were here, and so it was very difficult to meet him. I am looking forward to meeting him, and, certainly, we've heard from a lot of the

Congressmen we've talked to, because of hie Congressional background, very favorable reports, and that we look forward to having a working relationship with him comparable with the excellent relationship we had with Clayton Yeutter.

End of conference