Wednesday, May 8th, 2002

Free Trade Objectives Undermined By Destructive US Farm Subsidies

The $400 billion US farm subsidies Bill criticized by Trade Negotiations Minister Jim Sutton today is an issue that should rankle with every New Zealander, the Employers & Manufacturers Association (Northern) says.

The "aid" package to US farmers is over one and a half times greater than the total size of the New Zealand economy.

"This US election year Congress is placing the capture of farm votes ahead of US international obligations," said Alasdair Thompson, EMA's chief executive.

"The inward looking direction of US policy puts US farmer welfare ahead of US obligations under the WTO, and ahead of their own farmers long term well being.

"The development is alarming to all New Zealand business, not just our farmers.

"US (and European) farm subsidies not only drive farm product prices down, to the detriment of all farmers everywhere, including those they are meant to help, they reward inefficiency by holding back the adoption of new methods and technology.

"The subsidies badly distort food markets world wide, especially in third world countries whose food production is already marginal.

"The US farm subsidies Bill will hurt WTO efforts to develop free trade by sustaining the anti free trade movement which led to the Seattle riots.

"The Bill represents the opposite of free trade. It will harm the US reputation for upholding free trade, which it says it champions."

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