Australia fires first shot in US lamb war

By FWi staff

THE Australian Government has fired the first shot in its campaign to quash the USAs new lamb tariffs, claiming that the US decision contravenes World Trade Organisation rules on eight fronts.

In a submission to the WTO Trade Dispute Resolutions Panel, the Howard Government has demanded that the WTO order the USA to drop its lamb quotas and tariffs immediately to prevent further breaches of the trading rules.

“We will be asking the WTO panel to find that in imposing the safeguard measures in July 1999, the United States had not conformed with the requirements of the Safeguard Agreement and GATT 1994 and that it should revoke the import restrictions immediately,” an Australian trade spokesman told the Stock and Land.

US president Bill Clinton imposed tariffs on Australian and New Zealand lamb in July last year at the request of US lamb producers, who claimed lamb imports were hurting their livelihoods.

Under the Clinton scheme, Australian lamb exports under 17,140 tonnes shipped weight attract a 9% tariff, but the tariff rises to 40% once the 17,140t benchmark is reached.

The Government has argued in its submission that the US decision contravenes WTO rules because it was not based on fact.

The decision was made without proper justification. Certain countries were excluded from the new tariff system, and the severity of the restrictions was unwarranted.

Before the tariffs were introduced, the USA represented the most valuable export market for Australian lamb producers at A$125 million (47.5m) in 1998-99.

According to the Stock and Land, Australian exporters have altered their trade to the USA as a result of the import restrictions, shipping high value cuts into the volume-restricted market and finding markets for the lower value cuts.

As a result, in the six months of trade to January, Australian lamb exports to the USA had shrunk by only 10%, though the average price had risen.