Minister for Trade Simon Crean and Minister for Agriculture, Tony Burke, issued a joint statement slamming the US policy shift, saying the new subsidies are a "serious backward step".

US Secretary for Agriculture Tom Vilsack announced the reintroduction of export subsidies on Saturday, with the move to affect the competitiveness of Australian dairy exports on international markets.

The US announcement follows the recent reintroduction of dairy export subsidies by the EU, and comes as dairy farmers around the world struggle with the global recession and lower milk prices.

The Government says the move flies in the face of the commitments made by G20 Leaders not to impose protectionist measures.

"In taking this step, the US sends a negative signal to countries around the globe that are tempted to introduce their own protectionist measures," the joint statement says.

"Australia protested strongly at the time of the EU decision. We said the that move would invite retaliatory action, and we urged the US not to follow suit.

"Now, both the EU and US are using export subsidies and setting a poor example for the rest of the world. We strongly reaffirm the need for the US and the EU to show better leadership."

The Federal Government also said the US decision highlights the importance of concluding the World Trade Organisation's Doha Round, which could see the complete elimination of export subsidies.

Earlier this year the Government raised the issue directly with US Secretary Vilsack and wrote to him last month urging the US Administration to resist this course of action.

"We will seek urgent meetings between the US, Australia and other non-subsidising dairy exporters to help minimise the impact on Australia’s export markets for dairy products," Messrs Crean and Burke said.

Mr Crean said he had also spoken to New Zealand Trade Minister Groser this morning.

"We will be taking this issue up as a matter of priority with other ministers at the Cairns Group meeting in Bali in early June," he said.