US dairy subsidy: “protectionism”

Australia intends to pressure the US and enlist the help of other nations, to reverse a decision to reintroduce dairy subsidies, the federal government has announced.

This follows a commitment in April by G20 group leaders not to impose protectionist measures.

Retaliatory actions to restrict free trade could be sparked by the move, Trade Minister Simon Crean and Agriculture Minister Tony Burke say.

Media reports say the protectionist measure announced by US Secretary for Agriculture Tom Vilsack is viewed in this country as a serious backward step as Australia is a significant global supplier of dairy products.

Ministers Crean and Burke also said the US strategy comes as dairy farmers around the world are already struggling with the global recession and lower milk prices.

The US decision follows the reintroduction of dairy export subsidies by the European Union and after the Australian Government had urged Mr Vilsack and the US administration to resist this course of action, they said.

“This is another kick in the guts for our dairy farmers,” the ministers said.

The National Farmers’ Federation said the US should be breaking down artificial trade barriers to give a boost to global markets.

“Instead of breaking down artificial trade barriers such as tariffs, subsidies and quotas to jump-start economies the world over – including the floundering US economy – and give new impetus to global markets, the US is regressing into imaginary harbours that give it no protection at all,” NFF president David Crombie said.

Australia, which has already registered its objection at senior levels with the US Administration, will seek urgent meetings with the US in June and non-subsidising dairy exporters including New Zealand to help minimise the impact on Australia’s dairy export markets, the ministers said.

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