The board room

[fuagf]

EU told to 'show restraint' on dairy subsidies
BY LUCY SKUTHORP .. 27/01/2009

The European Union has been urged to "exercise some restraint" in a letter from the Australian Government expressing
concern about its recent decision to reintroduce dairy export subsidies to help farmers during the global financial crisis.

Last week European Union Agricultural Commissioner, Mariann Fischer Boel, announced the return of protectionist subsidy measures to support the local dairy market and European dairy producers' incomes following a rapid slump in world dairy prices.

The move comes despite agreement in November last year to refrain from introducing any new trade barriers within the next 12 months, designed to help finalise the ailing Doha negotiations.

The decision is expected to drive world prices down sharply by encouraging local farmers to keep producing milk and the EU to stockpile dairy products.

Federal Minister for Trade, Simon Crean, and Minister for Agriculture, Tony Burke, this week fired off a letter to their European Union counterparts outlining their opposition to the reintroduction of export refunds and the damage this does to progress on liberalising world trade.

But Commissioner Fischer-Boel insists that with world market prices now below EU market prices, EU exporters were no longer able to compete.

In an interview with Rural Press ahead of a meeting with EU trade commissioner Catherine Ashton this week, Mr Crean said it was fair to say the move was protectionist, but he was still awaiting details on the potential impacts on Australian farmers and world dairy prices.

He said the decision came as a surprise because the new trade commissioner had displayed good intentions to conclude the Doha round, and this subsidy introduction was "counter to the sentiments" and "against the spirit of intention" to finalise Doha and remove trade barriers.

He said fighting fire with fire, and introducing protection measures for our own industry would only exacerbate the "downward spiral to closing down markets", despite causing some short-term hardships for Australian farmers.
http://fw.farmonline.com.au/news/nationalrural/dairy/general/eu-told-to-show-restraint-on-dairy-subsidies/1417356.aspx
/////////////////////////////////
Lower tariffs in our fastest growing markets - in the Asia Pacific - will benefit Australian exporters and create more jobs for Australians. I am pleased to say that, over this decade, ASEAN has cut applied tariffs - on a trade-weighted basis - by two-thirds. In the same period, China cut its average tariff rate from 35 to 23 percent, and will reduce the rate to 15 percent by the year 2000.

The benefits of trade liberalisation are also beginning to be enjoyed by our neighbours. Freer trade in agricultural products, for example, is starting to give the people of Japan, Korea and Taiwan access to basic and luxury foods at prices they could only have dreamed of a few years ago.

APEC member countries are already moving toward the goal of free and open trade and investment. This is crucial for Australia because more than three quarters of our merchandise exports and two thirds of our services exports go to APEC economies. The APEC economies have grown by almost 8 % annually since 1973.

APEC's biggest achievement last year was to begin implementing the goals of free and open trade and investment by 2010 and 2020. Each APEC member produced an Individual Action Plan (IAP) setting out its initial steps towards the Bogor commitments. In these Individual Action Plans, member countries have made commitments to reduce further the applied rates of tariff. For example:

*The Philippines will reduce tariffs on most products to 5 % by 2004.
*Indonesia will reduce tariffs to a maximum rate of 10 % by 2003.
*Hong Kong and Singapore have both undertaken to bind their tariffs at zero % for all products by 2010.

In fact, Hong Kong is one of the best examples of how economic liberalisation has generated sustained wealth and opportunity, not just for the citizens of Hong Kong but for Australia and the rest of the region.
http://www.foreignminister.gov.au/speeches/1997/bjdalton.html