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End Date For Export Subsidies Very Welcome

19 December 2005

End Date For Export Subsidies Very Welcome For Nz Dairy Industry, Says DCANZ

The agreement reached at the WTO Ministerial meeting in Hong Kong this weekend to eliminate all export subsidies by 2013 has been warmly welcomed by the Dairy Companies Association of NZ (DCANZ).

DCANZ Chairman Earl Rattray was in Hong Kong for much of the conference. "Export subsidies have for decades been the single most trade distorting element in world trade - a deadly cancer for efficient exporters," he said. "It is great to be able to look forward at last to a certain date when they will disappear."

While the EU and other subsidisers had already agreed in principle to their removal, they had so far refused to set a date. "Having an agreed date for elimination will give farmers and the NZ industry greater certainty to make investment decisions over the next decade."

Mr Rattray noted that the butter his Hong Kong hotel provided in for its restaurant was imported from France. "As I ate my toast every morning I reflected that 60 percent of the cost of every pat of that butter is currently an export subsidy".

Removing export subsidies will have a significant positive impact on world dairy prices, but given the long time-frame of the change Mr Rattray cautioned it was very difficult to put precise numbers on the impact.

Mr Rattray expressed disappointment at the lack of progress this week on the rest of the agenda, particularly market access. "Market access is the heart of trade liberalisation. It was highly frustrating that despite spending a full week in negotiations Ministers made virtually no progress on the key remaining problem in agriculture in the Doha Round."

But Mr Rattray expressed confidence that the Round remained on track to conclude by the end of 2006. "The Hong Kong meeting has showed once more just how hard these deals are to put together and how progress is often agonisingly slow. But we are making gradual progress over time, and from what I saw this week I am confident that WTO members will succeed in getting the whole Round over the line next year."


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