Australia-Formal complaint to EU over farm subsidies.

AUSTRALIA-FORMAL COMPLAINT ABOUR EUROPEAN SUBSIDIES.

The European Union has been urged to "exercise some restraint" in a letter from the Australian Government expressing concern about its recent decision to reintroduce dairy export subsidies to help farmers during the global financial crisis.

Last week European Union Agricultural Commissioner, Mariann Fischer Boel, announced the return of protectionist subsidy measures to support the local dairy market and European dairy producers’ incomes following a rapid slump in world dairy prices.

The move comes despite agreement in November last year to refrain from introducing any new trade barriers within the next 12 months, designed to help finalise the ailing Doha negotiations.

The decision is expected to drive world prices down sharply by encouraging local farmers to keep producing milk and the EU to stockpile dairy products.

Federal Minister for Trade, Simon Crean, and Minister for Agriculture, Tony Burke, this week fired off a letter to their European Union counterparts outlining their opposition to the reintroduction of export refunds and the damage this does to progress on liberalising world trade.