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Fonterra Welcomes Breakthrough In Wto Round

Fonterra Welcomes Breakthrough In Wto Round

Fonterra Chairman Henry van der Heyden today welcomed the agreement reached in Geneva in the early hours of this morning on a framework for the WTO Doha Development Round.

“This is the breakthrough we have been looking for. It more than makes up for the disappointing set-back in Cancun last year, and puts the Round back on track for a substantial outcome for dairy farmers,” Mr van der Heyden said.

For Fonterra and other dairy exporters the major achievement is the agreement that all export subsidies will be eliminated. “While the date for that is still to be negotiated, nailing down that commitment has been a major objective of New Zealand farmers for decades.

“Export subsidies are the single most damaging and trade-distorting weapon in the protectionist arsenal. They depress prices for all involved in the world market. The wording in the framework now means that we can look forward to a time when this constraint on prices will disappear completely. That is good news for dairy farmers and will be reflected directly in Fonterra’s bottom line.”

“The second key element in the framework agreement for us is market access. The framework is less precise and ambitious in this area. A disappointing amount of flexibility has been granted to so-called ‘sensitive products’ in developed countries. But we are pleased that the text specifies that there will be substantial improvement in access for all products, including sensitive products. This is to be achieved through a combination of expansion of tariff-rate quotas and tariff reduction.”

The agreement also contains useful commitments to further define and limit domestic subsidies to farmers, particularly in rich countries.

“This agreement means we can now move into the final phase of the negotiations, which will be about translating these commitments into real numbers,” Mr van der Heyden said.

Noting that the negotiation of the framework was only achieved after a long and exhausting effort in Geneva, Mr van der Heyden paid tribute to the New Zealand negotiating team.

“I would like to thank Jim Sutton and the New Zealand officials for their untiring and dedicated efforts in representing New Zealand’s interests in Geneva”. Mr van der Heyden also praised the efforts of the chairman of the agricultural process, New Zealand ambassador Tim Groser.

“New Zealand has played a key role in achieving this outcome.”

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