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Australia settles long running trade dispute

Australian Trade Minister, Mark Vaile, and Industry, Science and Resources Minister, Senator Nick Minchin, today announced Australia had settled the long-running dispute with the US over assistance provided to the Australian automotive leather manufacturer, Howe and Company Pty Ltd.

"In reaching this solution I'm pleased to announce that we have removed the threat of retaliation against our exports to the US," Mr Vaile said.

"The prospect of innocent Australian exporters, including Howe, getting caught in the cross-fire had always been a major concern for the Government."

Mr Vaile said the settlement involved Howe paying $7.2 million dollars to the Federal Government. As well, the Government has also agreed to remove automotive leather from eligibility for support under the Textile, Clothing and Footwear (Strategic Investment Program) Scheme and the Automotive Competitiveness and Investment Scheme and has agreed to remove the custom duty on a range of products. The duty rate changes will apply from July 1, 2000.

Senator Minchin said he was particularly grateful for the close cooperation between the Howe company and the Government in resolving the dispute.

"I commend Howe for its co-operation and for the recognition it has given to the broader interests of Australian industry at stake in resolving the case," Senator Minchin said.

"Although disappointed with the outcome of the WTO Panel finding, Howe has accepted the terms of the understanding which will now bring to an end the harassment inflicted on the company over the past four years."

"This Government's clear focus on getting the economic fundamentals right has set the basis for Howe to build on its globally competitive business," Senator Minchin said.

Mr Vaile added: "We have never been happy with the way the US has pursued this globally successful Australian company, while at the same time handing out billions of dollars in assistance to its own agricultural producers. It highlights the real inequities in WTO rules between manufactures and agriculture which is why the Government strongly supports a new WTO round to rectify the situation."

Mr Vaile said the Government was determined to pursue its rights under WTO dispute rules in close cooperation with Australian industry.

"Our recent success in the Korea beef case shows the real benefits of the WTO system for Australian exporters. The Government will continue to pursue aggressively our interests in the WTO as we have done on beef and are continuing to do against the unfair and unjustified US measures on lamb."

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