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 — last month agreed that totally eliminating dairy product export subsidies is essential to successful negotiations within the World Trade Organi­zation (WTO).

“Export subsidies are highly trade-distorting and depress world markets, with particularly harsh effects on dairy producers around the world.  

“Export subsidies for industrial goods were banned within the GATT more than 40 years ago, resulting in great and enduring benefits to trade, and the increased economic prosperity of both developed and developing countries.

“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.

“We believe that the total elimination of export subsidies is essential to deliver the broader Doha reform mandate. The current trade negotiations on a framework text offer a unique opportunity to finally eliminate export subsidies.

“We welcome the willingness by the European Union to consider the elimination of export subsidies, but it should be viewed in the context of an ambitious outcome across all three pillars of support.

“To provide a commercially sustainable adjustment process for dairy products, the phased elimination of export subsidies should include transition measures such as:
Placing a limit on the ‘per unit’ subsidy and phasing the limit down over time.
Prohibiting the ‘roll-over’ 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.

“The elimination of export subsidies is of particular importance to developing countries in the Doha Development Round.”

The U.S. dairy industry is represented by the National Milk Producers Federation, the U.S. Dairy Export Council and the International Dairy Foods Association. df