Cairns group and US get tough on subsidies

By Boyd Champness

THE Australian-led Cairns Group has reached agreement with the United States on a number of issues in a bid to free up agricultural trade at the forthcoming Millennium Round of trade talks in Seattle.

Trade minister Mark Vaile has just returned from trade talks in Buenos Aires where the 14-nation Cairns Group discussed goals and strategies for the next round of talks with US Agriculture Secretary Dan Glickman.

Mr Vaile told The Age newspaper the Cairns Group and Mr Glickman agreed on most issues.

He said the prime goal of both parties at the next round was to establish rules for agriculture that were similar to those enjoyed by the manufacturing sector.

Both parties hope to achieve this by eliminating export subsidies, reducing domestic support of farm production (especially in areas of very high support) and by increasing market access for imports.

But in a warning to the European Union, the Cairns Group has also decided to oppose EU moves for the Millennium Round to recognise the “multifunctionality” of agriculture – that is, its role in rural employment, landscape protection and so on – Mr Vaile said.

“Just as it would not be acceptable to introduce multifunctionality into the World Trade Organisation in manufacturing and services, there is similarly no justification for it in agriculture,” Mr Vaile told The Age.

“If governments want to support those sort of matters, they should give support that is transparent and targeted, not a heavy subsidy to production.”