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World Owed An Explanation Over US Farm Subsidies

7 May 2002

The United States owed the world an explanation over its proposed Farm Bill, Trade Negotiations Minister Jim Sutton said today.

Mr Sutton said the United States always got an "A" for rhetoric about trade liberalisation, but at the moment, it would be lucky to get an "F" for effort.

He said it was "just ludicrous" that a modern, technologically competent, productive farm industry such as the United States farm business got about 30 per cent of its annual net income from subsidies.

The Farm Bill, expected to be signed into law by President George W Bush within a fortnight, boosts funding for subsidies and a range of environmental programs by $US73 billion. The total 10-year package is anticipated to cost about US$180 billion during its life.

Mr Sutton said the increased subsidies to American farmers would have an impact on the prices New Zealand farmers would receive for their products, as well as other effects.

"This is difficult for New Zealand to accept. We've worked with the United States to promote trade in agriculture. We have heard very fine speeches. This bill just flies in the face of all that.

"If passed, it will inevitably led to the US breaching its WTO commitments on subsidies.

"We and the other countries who have worked hard to open up markets deserve an explanation."

Mr Sutton will be in Washington DC later this month and will meet with both agriculture secretary Ann Veneman and trade representative Robert Zoellick.

"I can't have a discussion with USTR or the Agriculture Secretary without mentioning the Farm Bill."

He said that any decision on what action to take against the passage of the Farm Bill would depend on those discussions and talks with other affected nations.

Office of Hon Jim Sutton

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