Press Release

9 July 2000

UNITED STATES' USE OF DAIRY SUBSIDIES DISAPPOINTS MINISTER

Trade Negotiations Minister Jim Sutton expressed disappointment today at the allocation of subsidies for a range of dairy products by the United States Government under its Dairy Export Incentive Programme.

This year’s DEIP allocation, announced by US Agriculture Secretary Dan Glickman last week, will be to the maximum level allowed under the United States' Uruguay Round commitments. Under the DEIP, subsidies are applied to designated quantities of dairy products, boosting the competitiveness of US dairy exports in international markets. Subsidies are being made available this year for 68,201 tonnes of skim milk powder, 21,097 tonnes of butterfat, and 3,030 tonnes of various cheeses.

Mr Sutton said that while the allocations were within the United States' WTO commitments, he was disappointed that the United States has chosen to make full use of DEIP subsidies.

He was particularly concerned that the entire DEIP amount will be available this year under a global rather than a regional allocation.

?This means the DEIP can be allocated into any market available on a first-come first-served basis. This could affect markets important to New Zealand.?

Mr Sutton said New Zealand, and the rest of the Cairns Group of agricultural exporting nations, looked to the United States for leadership on reducing the use of agricultural subsidies.

?Last week when the United States announced its WTO agricultural negotiating position, it called for the elimination of all export subsidies. This sent a strong message, and one which New Zealand welcomes and wholeheartedly supports. But the US has missed the opportunity to reinforce the message by matching its words with its deeds.?

?We look forward to the day that the stated US position is converted into WTO rules so that the US, European Union and other export subsidisers stop undermining world dairy markets.?

Mr Sutton said he had raised the Government's concerns about the United States' dairy subsidies with American officials he met in Washington DC two weeks ago.

ENDS

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