Nusa Dua, Indonesia, June 8 - European Union dairy export subsidies fall within World Trade Organisation (WTO) commitments and will not be eliminated before 2013, a top European trade official told Reuters.
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 chances 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 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 in an interview late on Sunday.
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.
DEPRESSED WORLD MARKET
In January, the European Union revived its export subsidies for butter, cheese and skimmed milk powder, which had been suspended since 2007, to help its struggling exporters better compete on the depressed world market.
The U.S. Agriculture Department said in late May it will subsidise about 92,000 tonnes of dairy products headed for the world market to help U.S. farmers hit by plunging international prices and trade volumes, the first time in five years it will use its subsidy programme.
The Cairns Group said on Sunday in a draft communique that the European Union and the United States must remove their dairy export subsidies "in the shortest timeframe".
Guth said he saw a limited prospect of relaunching Doha talks before the WTO's Nov. 30-Dec. 2 ministerial meeting. The WTO has not held a ministerial meeting since December 2005 because officials thought they would be overtaken by Doha talks.
"There is not progress on the substance and you can only agree on a ministerial conference when there is enough political commitment and enough signs of possible progress," Guth said.
The proposed safeguard mechanism to protect farmers in developing countries, spearheaded by India, remained a key issue, he said.
"The United States and some exporters want to be sure that it's not the safeguard which closes them off the market, and other developing countries want to be sure that they have a credible and biding instrument of safeguard when there is a surge of imports. This conflict is not solved."
Another controversy in the Doha talks is a U.S.-Canadian proposal to move to negotiations on setting individual tariffs, known in trade jargon as "scheduling", rather than waiting to agree on the formulas underlying tariff and subsidy cuts, known as "modalities".
Guth said modalities should be given the top priority.
"The first and next important step is reaching modalities, completing the outstanding issues and then look how to do the timing, how to do the technical work afterwards. One after another."