Press Release

28 June 2000

EXPORT SUBSIDIES MUST GO: SUTTON

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 – many of whose domestic markets are disrupted by others' use of export subsidies. I therefore expect the Cairns Group's proposal to generate much support in the negotiations."

Agricultural subsidisation has been a major focus of the Minister’s travel to Washington, Paris and Geneva.

While in Paris, he met French agriculture minister Jean Glavany, French trade minister Francois Huwart, and European Union Trade Commission Pascal Lamy and discussed New Zealand's unhappiness about export subsidies with them all.

“I was delighted to see the abolition of export subsidies figure so prominently in the US proposal also submitted to the WTO negotiations. Today in Paris in my lead intervention at the OECD Ministerial, I told participants that a new round of WTO negotiations that did not include an ambitious agenda for food and agriculture would be intolerable.”

The Cairns Group and other proposals will be discussed initially in the agriculture negotiating session taking place in Geneva 29-30 June.

“ I look forward to observing the WTO session later this week in Geneva,” Mr Sutton said.

He returns to New Zealand on Sunday, July 2.

ENDS

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