NZ Dairy Giant Says EU Subsidies May Slow Recovery

The European Union's decision to restore some subsidies to its dairy products could further depress prices and slow economic recovery, according to New Zealand dairy giant Fonterra.

　　Fonterra said on Monday that the reintroduction of subsidies will put pressure on the world market at a time that is already difficult for dairy exporters worldwide.

　　The EU dropped export subsidies for its producers of butter, cheese and milk powder two years ago, but they will come into effect again next week.

　　The move has been condemned by the New Zealand government as a distortion of world trade that would affect many countries.

　　Fonterra senior executive Kelvin Wickham said the EU policy could further depress dairy prices and slow economic recovery, because it sends the wrong market signals in Europe.

　　New Zealand Trade Minister Tim Groser said the EU's decision was "a backward step" in trade talks which could have benefited New Zealand producers and does nothing to promote confidence in global trade negotiations.

　　He believes the move could push down international dairy prices.

　　Groser said New Zealand's farmers would gain about 1 billion NZ dollars (546 million U.S. dollars) a year if the subsidies were scrapped, but the EU's decision was terrible timing.

　　He said the World Trade Organization is making progress with the Doha trade talks, which aim to remove such subsidies.(Xinhua)