Dairy subsidies stay until 2013, says EU

European Union dairy export subsidies fall within World Trade Organisation commitments and will not be eliminated before 2013, a top European trade official says.

Eckart Guth, EU ambassador to the WTO, also said he did not see much recent sign of progress in global trade talks that could offer the chance of relaunching the Doha Round before the next regular ministerial WTO meeting slated for late November.

Dairy subsidies introduced by Europe and more recently the United States have come under fire from countries such as Australia and New Zealand, both major dairy exporters.

The dairy sector accounted for 27 per cent of all New Zealand exports for the year to last May.

"Export subsidies are considered as a tool which should be eliminated under the Doha Round and we have taken a commitment to eliminate these export subsidies in 2013 and not before," Guth said.

Guth, who was attending a meeting of the Cairns Group of 19 major agricultural exporting countries on the Indonesian island of Bali, said a proposed safeguard mechanism to protect farmers in developing countries from a surge in imports remained a key obstacle in the troubled Doha trade talks. A dispute between Washington and major emerging countries such as India and China over the safeguard mechanism caused last July's global trade talks to collapse.

The global economic crisis has been sharpening pressures for protectionism, despite hopes that political conditions for a world trade deal are improving.

- NZPA