Agriculture and Trade Negotiations Minister Jim Sutton today expressed his disappointment at Chile's decision to impose a definitive safeguard measure of 12% on imports of liquid UHT and powdered milk.

"This decision, while not entirely unexpected, is an unwelcome start to the New Year. It threatens an important market for New Zealand dairy exports."

The new duty replaces a provisional measure of 16% imposed in July last year while Chile conducted an investigation into the effect of milk imports on their domestic dairy industry. The 12% increase will be in place for one year, and will take the total tariff on New Zealand milk exports to Chile to 21%.

Mr Sutton said it was "frankly disappointing" that Chile, a fellow Cairns Group member advocating freer trade in agricultural goods, had decided to take this action. Imposing additional penalties on unsubsidised New Zealand exporters would not provide lasting help to Chilean farmers, he said.

"I am not satisfied that Chile has demonstrated that increased milk imports have caused harm to the domestic industry. The problems in the Chilean dairy sector seem to have been caused by other factors such as the Chilean dairy industry's structure and the recession in Chile in 1999.

"New Zealand will, along with other affected countries, be evaluating our options for taking this matter further."

New Zealand's exports to Chile in the year to June 2000 totalled $NZ58m, of which milk products made up $NZ12.6m. Exports of other dairy products totalled another $NZ20m.

ENDS

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