An alliance of global dairy organizations has agreed that totally eliminating dairy product export subsidies is essential to successful negotiations within the World Trade Organization (WTO).
The dairy industries in the United States and the Global Dairy Alliance nations of Argentina, Chile, Brazil, Uruguay, New Zealand and Australia, which together represent two-thirds of global dairy trade, say the current trade negotiations on a framework text offer a unique opportunity to finally eliminate export subsidies.
"Export subsidies are highly trade-distorting and depress world markets, with particularly harsh effects on dairy producers around the world," a statement released by the organization says.
"Although the Uruguay Round imposed important disciplines on world agricultural trade and subsidies, it left in place a number of inequities that have perpetuated an unfair trading system in agricultural products. This is particularly true for dairy products," the statement says. "We believe that the total elimination of export subsidies is essential to deliver the broader Doha reform mandate."
The groups welcome the European Union's willingness to consider the elimination of export subsidies. They add in order to provide a commercially sustainable adjustment process for dairy products, the phased elimination of export subsidies should include transition measure such as:
- Placing a limit on the â€˜per unitâ€™ subsidy and phasing the limit down over time
- Prohibiting the â€˜roll-overâ€™ of export subsidy provisions (such that countries with export subsidy commitments cannot exceed their commitment in any one year)
- Eliminating the use of component subsidies
- Maintaining the disaggregation commitments of export subsidies
- Establishing a simultaneous period of elimination for all products
- Establishing a time frame for elimination that is not greater than comparable time frames in increased market access.