Cairns Group proposal to end export subsidies

Trade Minister, Mark Vaile, has welcomed a major negotiating proposal on the elimination of agricultural export subsidies by the Cairns Group of agricultural fair trading nations to the World Trade Organisation (WTO).

Mr Vaile said the proposal calling for the end to export subsidies had been submitted to the WTO in time for its next session of agriculture negotiations to take place in Geneva June 29-30.

Key elements of the Cairns Group proposal include:

* significant subsidy cuts as soon as negotiations conclude - with up to 50% reductions in the first year
* stronger disciplines to avoid countries circumventing subsidy rules
* tighter rules on other forms of export competition, including subsidy components of export credit guarantees
* flexibility for developing countries on the timing of subsidy elimination.

"There's a crying need for stronger trade rules on export subsidies given the huge amounts of money countries like the US and EU are still able to offer," Mr Vaile said.

"The US, for example, can still legally offer export subsidies of around US$363 million for wheat and wheat flour, while the EU is able to offer a massive US$1.4 billion in the same sector.

"I congratulate the Cairns Group for being first to lodge an ambitious negotiating proposal. The elimination of export subsidies is a key plank of Cairns Group work to get trade in farm products on the same footing as other goods.''

"We need to be clear on the huge burden that export subsidies place on efficient producers like Australia. The same applies for developing countries and I'm pleased to see increasing support for the Cairns Group position from a range of trade groupings such as APEC, the Group of 77 developing countries, and the Group for Free Trade in the Americas".

"The Cairns Group proposal is important because it demonstrates the Group's unity and commitment to pursue ambitious trade reform in the WTO agriculture negotiations, and sets a benchmark for other countries to match."

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