[asia-apec 521] NZ Protest at US dairy subsidies

[Gatt Watchdog]

Protest over USA dairy export incentives - from Export News (NZ) 20/7/98

New Zealand continues to object to the USA's subsidation of dairy exports
through its Dairy Export Incentive Programme (DEIP), says Trade Minister
Lockwood Smith.

New Zealand's protest follows an announcement by the USA of the 1998/99 round
of DEIP export subsidies which assist the competitiveness of US dairy exports.

"While we note that the USA has reduced its DEIP subsidies as required under
its Uruguay Round obligations, we will continue to advocate the elimination
and prohibition of this and all forms of export subsidies," Dr Smith says.

In 1998/99 the USA will subsidise 84,212 tonnes of skimmed milk powder exports
(compared with a subsidy allocation for 92, 217 tonnes in 1997/98), 122,419
tonnes of butterfat (137,446 tonnes in 1997/98), 5003 tonnes of whole milk
powder, (7,487 tonnes in 1997/98) and 3,350 tonnes of cheese (3,510 tonnes in
1997/98).

Dr Smith says continued subsidisation through the DEIP was particularly
disappointing given the USA's commitment to the Cairns Group's agenda for the
1999 World Trade Organisation (WTO) negotiations to liberalise agricultural
trade.  That agenda includes the total elimination and prohibition of all
export subsidies and the removal of all domestic subsidies which distort
trade.