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Wednesday, 3 May 1989
Page: 1677


Senator MACKLIN —My question is directed to the Minister for Foreign Affairs and Trade. It is made in the context of Vice-President Quayle's recent assertion that United States agricultural export subsidies are not affecting Australia's economy and Mr Quayle's warning that protection was still immensely appealing to members of the US Congress. What specific new steps is the Government intending to take in its representations to the US Administration, and particularly to Congress, to ensure that Australia's interests are not harmed in the forthcoming US farm Bill? In addition, will these steps consist of an all-party parliamentary delegation to the US to convey to leading congressmen, particularly those from the urban electorates who are paying the bill in the US, Australia's concern at export subsidies and the importance of a free market approach in the ongoing discussions and eventual vote on that farm Bill?


Senator GARETH EVANS —The Government's and indeed the country's concern about the impact of the export enhancement program (EEP) on Australian agriculture, and wheat farmers in particular, although not acknowledged by Vice-President Quayle when he was here, is something of obvious impact in Australia. It is something we are all concerned about and we are very concerned to continue to get that message across in a variety of ways.

As we all know, a primary objective of the EEP was to enable the US to win back market share from subsidised agricultural exporters. While this has happened in some markets at the expense of the European Community (EC), overall the cost has fallen on unsubsidised exporters such as Australia and other members of the Cairns Group. The statistics bear repeating: Australia's share of the world wheat and flour market has declined from 19 1/2 per cent in 1985-86 to an estimated 11.3 per cent in the current financial year. Meanwhile the US share of the market has increased from 28.7 per cent in 1985-86 to an estimated 42.9 per cent in 1988-89 while at the same time the European Community, against which the EEP has allegedly been targeted, will have increased its share from 17.4 per cent to an estimated 20 per cent or very near to it.

Further damage has occurred through the price depressing effect of the EEP on world markets, which has in turn further reduced grower returns. We are monitoring the Budget debate in the US on the future of the EEP. We certainly welcome ongoing US Department of Agriculture and General Accounting Office (GAO) reviews of the program's operation. We are making an input into the GAO review process through a quite substantial document which is presently in process of preparation, spelling out with as much precision as we possibly can the way in which the EEP has operated to Australia's disadvantage and without advancing, we would argue, the cause that it was originally put in place for.

A number of further representations will be made at different levels within the US Administration on this subject in the period ahead and particularly in the context of the renewal of the farm legislation which is proposed over the next year or so. It may well be that another delegation by an all-party parliamentary committee of the kind that Senator Macklin, I know, has been previously involved in would be a useful contribution to that process, particularly in sensitising a number of senators and congressmen who tend, as do many people in the United States, not to look beyond the boundaries of that country, or in their cases their own constituencies, in determining the economic impact of measures of this kind. It may be that an effectively led, managed and briefed delegation of this kind could make some impact again in sensitising the US Congress and Administration to our concerns. I will certainly pass on that proposal to the Prime Minister. We will discuss it, no doubt, in the period ahead as one of a number of statagems that we need to put in place to advance the cause.