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Minister concerned by further use of export subsidies

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The Deputy Prime Minister and M inister for Trade, The Minister for Primary Industries and Energy ■ - 1 1 1 - f - ■ ■ - .................................. —



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Deputy Prime Minister and Minister for Trade, Tim Fischer, and Minister for Primary Industries and Energy, John Anderson, both expressed concern today at the announcement overnight that the US Administration would subsidise the sale of barley under its Export Enhancement Program. "The trend evident in this further announcement of EEP is very worrying," Ministers said. 'V

"Coming on top of the extension of dairy subsidies under DEIP, and the reactivation of EEP for poultry in early May, the reactivation of the EEP program for barley is a blow to all non-subsidising countries like Australia."

US Secretary for Agriculture, Dan Glickman, announced on 27 May that the US would subsidise sales of 30,000 tonnes of barley to Algeria, Cyprus and Norway. "These specific measures may have little or no direct impact on Australian markets , but wherever they are applied, subsidies have market distorting effects which harm all agricultural exporters, including Australia," Ministers said.

Ministers acknowledged that the US Administration’s decision to use EEP to subsidise barley sales is a direct response to the recent EU sale of heavily subsidised barley into the US.

"However, these tit-for-tat exchanges between the US and the EU have a history of catching efficient, unsubsidised exporters like Australia in the crossfire. They also risk further escalating the use of export subsidies."

"The disruptive effect of its subsidy policies is something we continue to take up with the Europeans," Ministers said.

Ministers called on the US to continue to adhere to the assurance, given by President Clinton during his 1996 visit, that the US would seek to ensure its use of export subsidies did not, directly or indirectly, work to the disadvantage of Australia.

"This announcement underscores the need for the forthcoming round of WTO agriculture negotiations to eliminate trade distorting export subsidies once and for all," Ministers said. "While we very much welcome Secretary Glickman’s recent endorsement of this position, we are concerned that the continued use of export subsidies by the US and EU will undermine our ability to make significant advances on this long-held objective of the Cairns Group."

Ministers said they would continue to put Australia’s case robustly to both the US and EU.

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