The Federal Government has slammed the United States' Congress's decision to pass the Farm Bill by overriding a veto by President George Bush, saying the move will harm international trade and directly affect Australia's competitiveness.
President Bush vetoed the Bill on Wednesday, describing it as "inconsistent" with the US objectives in the Doha Round of multilateral trade negotiations.
But the US Congress has now moved to over-ride the President's veto.
Trade Minister Simon Crean and Agriculture Minister 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, they said.
The 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.
Mr 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 of liberalisation," he said.
"Through his veto he has clearly signalled 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 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.
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