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Tuesday, 28 April 1987
Page: 1870

Senator ARCHER(3.10) —I move:

That the Senate take note of the paper.

The paper put down by the Minister for Trade (Mr Dawkins) on 2 April covers many aspects of the problems that exist in the freeing up of trade particularly in agricultural products. The deterioration in trade relations between the United States and Japan brought this matter of concern to our attention. It should present considerable difficulty to Australians because of the effect that it will have on us for quite a long time to come. It is symptomatic of the wider disease which is seen as a shift towards even greater protectionism by some countries, and of export standardisation by many other major industrialised nations.

The shift towards protectionism has particularly disadvantaged Australia because Australian agricultural products represent more than one-third of our total exports of goods and services. Moreover, our agricultural trade is strongly market oriented and it is dependent on export. Therefore, developments in the international market prices and market access have a great influence on the viability of our domestic farm sector. The corruption of international agricultural trade also adversely affects our local primary industries because Australian governments have correctly pursued a basically non-interventionist role in agriculture. As a result, Australian agriculture has undergone structural adjustment leaving it efficient and productive. Such adjustment has not occurred in many industrial nations.

The resultant oversupply on world markets of a wide range of commodities has had a particularly adverse effect on Australia's national income. For example, the Bureau of Agricultural Economics has estimated that the policies of the European Economic Community alone have resulted in Australia forgoing almost $1 billion for our six major agricultural exports. It is in this context that the Government's proposal for international agricultural reform, as stated by the Minister for Trade in a number of forums, are twofold: Firstly, to establish a basis from which to freeze and then to reduce subsidies, especially in the major industrial nations. Secondly, to reduce the gap between excessive domestic support prices and world prices with the ultimate aim of breaking the link between subsidisation and overproduction. The Opposition has supported and will continue to support this initiative in a bipartisan fashion.

As is often the case in trade negotiations, there is broad agreement in principle, but when it comes to meaningful and lasting trade reform many countries want to be second into the market. The difficulty Australia obviously faces when it promotes moves towards freer and fairer trade, particularly with the United States and Japan, is domestic political reality. This short-sighted attitude ignores the fact that approximately 60 per cent of the value added by EEC agriculture came from consumers and taxpayers through transfers and subsidies costing around $39 billion in 1984 prices. So it is difficult to be optimistic about the prospects for genuine and lasting reform of agricultural trade in the near future. This should not deter Australia from pursuing relentlessly the course of fairer and freer trade in international commodities.

As a low protection, low export subsidy country, our views should hold greater currency than that of most countries in international trade reforms. Furthermore, we must continue to promote multilateralism in agricultural trade. The punitive steps taken by the US against Japan 10 days ago exemplify the dangers inherent in bilateral negotiations conducted in an atmosphere of mutual suspicion and antagonism. On behalf of the Opposition I welcome the Trade Minister's statement. I support the thrust of the Government's initiative in a campaign for agricultural trade reform which will be a long and painful one. It is essential not only for Australia's economic future, but also for the long term well-being of the international economy.