Australia criticises EU pork subsidies
imposed subsidies on European pork exports. A formal complaint was
made this week by agriculture minister Warren Truss about the
reintroduction of export refunds.
Australians are worried that the subsidies, which are aimed at markets other than Australia, will help to depress prices in markets targeted by Australian pork exporters. Truss informed the EU Agriculture Commissioner Franz Fischler that his country would reserve the right to retaliate if the EU did not immediately remove the subsidies.
"The Australian government had hoped we had seen the last of export refunds on European pigmeat, but some of their export refund subsidies have been reintroduced after a three-year absence," Truss said in a statement.
"While the subsidies cover few of the pigmeat cuts exported to Australia, we consider that any increase in export subsidies further damages an already distorted world market. By subsidising exports into other markets, the European Union may damage Australia's export opportunities."
The European Union however believes that the subsidies are necessary to avert a crisis. The euro is currently very strong against the dollar, feed prices are very high due to last summer's drought and consumer demand for pork is low. These factors come on top of the usual cyclical fluctuations.
Last year, the Commission responded by introducing a private storage scheme to alleviate the market pressures. Some 85,000 tonnes of pig meat have already been bought into this scheme to date. But although private storage managed to stop the fall in prices by stabilising them, they are still at a very low level, with no sign of them picking up.
The EU therefore decided to reintroduce export refunds for pig carcasses and cuts for a limited period. The refund is set at €40 per 100kg and will be valid for all third countries (except the 12 acceding and candidate countries). In addition, the exports have to be carried out before the end of April 2004. The proposal entered into force on 27 January 2004.
"Exceptional circumstances call for exceptional measures," said Fischler. "The temporary reintroduction of export refunds for pig meat is the last resort, after having exhausted all other means. This measure will help pig farmers in the EU who have been shaken by an extraordinary crisis."
Australia remains unconvinced by such arguments, and is considering retaliating through the World Trade Organisation. This allows countries to impose punitive tariffs on imports found to be unfairly subsidised. Australia may also consider using its anti-dumping laws.
"We have several options available to seek redress for any damage to the Australian market from this or future subsidy measures," he said. "More to the point, we are prepared to use those options if we believe our domestic or export markets have been undermined."
