Identifier
Created
Classification
Origin
08CANBERRA544
2008-05-27 07:22:00
UNCLASSIFIED
Embassy Canberra
Cable title:  

AUSTRALIA CRITICAL OF US FARM BILL

Tags:  EAGR ETRD AS 
pdf how-to read a cable
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UNCLAS SECTION 01 OF 02 CANBERRA 000544 

SIPDIS

STATE PLEASE PASS USTR; STATE FOR EEB, ANP

E.O. 12958: N/A
TAGS: EAGR ETRD AS
SUBJECT: AUSTRALIA CRITICAL OF US FARM BILL

UNCLAS SECTION 01 OF 02 CANBERRA 000544

SIPDIS

STATE PLEASE PASS USTR; STATE FOR EEB, ANP

E.O. 12958: N/A
TAGS: EAGR ETRD AS
SUBJECT: AUSTRALIA CRITICAL OF US FARM BILL


1. Summary: (U) The Australian Government has been openly
critical of the just-passed US Farm Bill. Following the
final passage of the Farm Bill, Trade Minister Simon Crean
and Agriculture Minister Tony Burke issued a joint press
statement on May 23 which criticized the action by Congress
for continuing trade-distorting farm subsidies. (Press
statement in para 5 below.) End Summary.


2. (SBU) Crean trade adviser Sophie Ward told embassy that
the ministers' main concern was in getting to a successful
conclusion of the Doha round. She reiterated what Burke
called a "missed opportunity" for reform of the US
agricultural sector - especially now, at a time when farmers
are enjoying high prices. Ward stressed that Crean welcomed
President Bush's commitment to trade liberalization, but also
expressed concern about the WTO consistency of the Farm
Bill,s implementation.


3. (U) In press comments, Crean said the bill "entrenches the
welfare approach to farm policy in the United States," and
called it "short-sighted, reactive, and a lost opportunity."
Burke and Crean both expressed concern about its impact on
Australian agricultural producers. Burke singled out the
proposed levy on imported dairy products, which he feared
would hurt Australian cheese exports to the US.


4. (SBU) Comment: The passage of the Farm Bill was not a
surprise to Australians, who as major agricultural exporters
follow American farm politics closely. It has generated a
spate of negative press coverage which in addition to
identifying possible "losers" in Australia (cheese and meat
producers for example) generally repeat the theme that this
Bill is a step backwards, could be a sign of further American
trade protectionism, and will hurt both Australian producers
and the prospects for success in Doha. The GOA is rarely
quite so blunt in criticizing US actions. However, in their
comments, Crean and Burke have been careful to note President
Bush's opposition to the Bill; Australian politicians
understand this was a Congressional move not supported by the
Administration. This will almost certainly be raised during
the upcoming FTA joint committee review on June 2. End
comment.


5. (U) Here is the text of the joint press statement from
Trade Minister Simon Crean and Agriculture Minister Tony
Burke, May 23, 2008:

United States Congress overrides President Bush on Farm Bill

Veto

The Rudd Government today expressed its disappointment at
Congress' decision to pass the United States Farm Bill, by
overriding a veto by President Bush.

President Bush vetoed the Bill on May 21, describing it as
"inconsistent" with the US objectives in the Doha Round of
multilateral trade negotiations. The US Congress has now
moved to override the President's veto.

Minister for Trade Simon Crean and Minister for Agriculture,
Fisheries and Forestry Tony Burke said the Bill would
guarantee US taxpayer-funded farm subsidies for the next five
years.

It would continue a trend of trade-distorting programs
underpinning the US agriculture sector, which has an adverse
impact on Australian agricultural exporters.

The Bill proposes making subsidies more readily available to
QThe Bill proposes making subsidies more readily available to
US farmers for commodities such as wheat, barley and sugar
and guarantees payments to crop growers, should prices fall
below increased thresholds, despite crop prices being at
record high levels. It also imposes discriminatory charges
against our dairy exporters.

Trade Minister Simon Crean said he was frustrated with the
way the Congress had looked at the domestic politics rather
than looking at the bigger picture.

"But I'm pleased by the President's commitment to the cause

CANBERRA 00000544 002 OF 002


of liberalization," he said. "Through his veto he has
clearly signaled that he wants to keep the pressure on global
reform, which augurs well for Doha."

"Reducing trade-distorting farm subsidies would benefit
producers and consumers around the world," Mr Crean said.

Agriculture, Fisheries and Forestry Minister Tony Burke said
the Rudd Government worked hard to seek a level playing field
for Australian producers.

"At a time when the world food shortage is front-of-mind, it
is disappointing that some of the wealthiest nations are
increasing their use of trade-distorting subsidies," Mr Burke
said.

"We are particularly concerned about the proposed levy on
imported dairy products, which would promote US consumption
of liquid milk products, as opposed to cheese which is
imported from Australia.

"The Australian agriculture sector has shown great innovation
in boosting efficiency and productivity without relying on
taxpayer-funded assistance."

The US Congress has guaranteed increased direct payments to
farmers, at a time when net farm incomes are projected to
increase by US$28 billion next year.

"This is a missed opportunity by Congress to reform US
agricultural policies, particularly given the current high
crop prices and good producer returns," Mr Burke said.

End text.

MCCALLUM