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Dairy Exporters Concerned At Slow Geneva Progress

MEDIA RELEASE
19 JULY 2005

DAIRY EXPORTERS CONCERNED AT SLOW PROGRESS IN GENEVA

The Global Dairy Alliance1 (GDA) has again urged negotiators to take up the challenge of eliminating distortions in international agricultural trade, as drafting commences in Geneva of the 'First Approximations' paper for the Doha Development Round.

"We have been deeply concerned at the limited progress in the agriculture negotiations, said Osvaldo Cappellini, Chair of the Global Dairy Alliance.

"Leadership from the very top is essential if the world is to see progress in these key goals. We were therefore heartened by the comments of President Bush and other leaders at the G8 summit, laying down a challenge to eliminate trade-distorting subsidies."

However, Mr Cappellini urged that unless these broad statements are translated rapidly into action by negotiators in the WTO Doha Development Round, they are a waste of breath and the Doha Round will be a failure.

"For too long export subsidies, domestic support schemes and restricted market access have hindered unsubsidised dairy producers exposed to international prices, including many producers in developing countries".

The GDA strongly supports the efforts of negotiators in Geneva to develop an ambitious "First Approximation" by the end of July to serve as a basis to establish modalities at the Ministerial Meeting in Hong Kong in December.

We certainly expect a far more cooperative and positive approach than we have seen in Geneva in the first half of 2005 and there are signs that the G-20 initiatives, tabled at last weeks mini-ministerial meeting in Dalian may lead to progress.

For the GDA the key issues are

* Turning the commitment to eliminate export subsidies into a firm programme with an end date and an implementation schedule

* Achieving tariffs cuts that eliminate "water" and reduce higher tariffs by a much greater proportion than lower tariffs.

* Ensuring that, for any dairy products placed in the sensitive products category, there are substantial compensating improvements in market access.

Also of importance for GDA members are caps on product-specific domestic support; limits on the flexibility applied to "special products", and limiting the intrusion of Geographic indications into international dairy trade.

Visit www.globaldairyalliance.org for updates

Footnote1 The Global Dairy Alliance (GDA) represents the dairy industry of the world's main non-subsidised exporting nations: Argentina, Australia, Brazil, Chile, New Zealand and Uruguay.

BACKGROUND NOTES

Global Dairy Alliance - Battling the Tariffs

The Global Dairy Alliance includes the dairy industries of Argentina, Australia, Brazil, Chile, New Zealand and Uruguay.

The Alliance represents more than 1.5 million dairy farmers, 60 billion litres of milk production annually and a majority of world dairy trade .

The dairy sector is one of the most heavily subsidized and distorted sectors in global agricultural trade. Average government support for dairy production within the OECD is over 46 per cent.

Subsidies, particularly those paid on exports, also heavily influence world dairy prices and the livelihoods of dairy farmers worldwide. Five years after full implementation of the Uruguay Round, the European Union can still spend over 2 Billion Euros annually to subsidize the sale of dairy products into world markets.

Other examples of how some nations limit free market access, depress farmers' milk prices in other countries, and reduce returns for some of the world's poorest dairy farmers include

* Dairy tariffs are among the highest in the world, with many tariffs in key developed markets being well over 100%

* The tariff on butter in Japan is more than 500%

* Dairy tariffs in Canada are between 200% and 300%

* EU cheese quotas limit imports to around 100,000 tonnes in a market of 7 million tonnes

* Fortnightly decisions made by EU officials on export subsidies have negative repercussions on the incomes of dairy farmers throughout the world.

The GDA seeks

* Elimination of all export subsidies within three years

* Strong disciplines on the use of food aid and all other export competition policies (such as export credits)

* Substantial, progressive improvements in market access for dairy products leading ultimately to the elimination of all dairy product tariffs and tariff quotas

* Progressive elimination of all trade-distorting domestic subsidies in developed countries.

- ENDS -

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