DCANZ Welcomes WTO Breakthrough

News Release 2 August 2004

DCANZ WELCOMES WTO BREAKTHROUGH

The Dairy Companies Association of New Zealand (DCANZ) has hailed the weekend breakthrough in the WTO Doha Round agriculture talks as excellent news.

"It's a great day for New Zealand agriculture. The prospect of a more level playing field in international markets is now within our grasp," DCANZ Chairman Earl Rattray said.

The agreement to eliminate export subsidies by a certain date was of tremendous potential value to New Zealand dairy exporters.

"Financial returns from world markets have at times been severely depressed by unfair export subsidies from Europe and elsewhere," Mr Rattray said.

"Having agreed the principle of export subsidy elimination, we now need to get down to brass tacks and sort out the details. In our view dairy export subsidies should be eliminated within three years of the Doha Round agreement entering into force."

Mr Rattray added that DCANZ had clear ideas about the way forward. These ideas were included in a statement by the Global Dairy Alliance(1) and the US dairy industry last month, which together proposed certain transition measures for the phase out of export subsidies, such as:

* Placing a limit on the per unit subsidy and phasing the limit down over time.

* Prohibiting the rollover of export subsidy provisions (such that countries with export subsidy commitments cannot exceed their commitment in any one year).

* Maintaining the reduction commitments by product rather than on an aggregated basis.

* Establishing a simultaneous period of elimination for all products.

Mr Rattray said DCANZ believes the outlook for dairy exports is enhanced by the agreement to improve access to highly protected markets.

"All we have ever asked for is a level playing field. We are not there yet but the Doha Round looks set to improve the prospects for us considerably," he said.

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