The Cairns Group negotiating proposal to eliminate export subsidies is a positive step forward in agricultural negotiations, Trade Minister Jim Sutton said today.

Mr Sutton is to go to Geneva to observe the World Trade Organisation special agriculture negotiations, where the Cairns Group proposal will be discussed.

The comprehensive proposal calls for: * the elimination of export subsidies within a fixed time period; * substantial (at least 50%) reductions in export subsidies in the first year after the negotiations; * tighter rules to prevent countries getting around the elimination; * tighter rules on using other export competition measures, including export credits, to subsidise exports; and * flexibility for developing countries in the time frame for their eliminating export subsidies.

"Export subsidies are the most distorting of trade measures. New Zealand's diary and beef industries lose millions of dollars each year because of other countries' export subsidy practices.

"There is no justification for these policies to continue. This point is accepted by the vast majority of WTO members

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