PRESS/26
18October 1995
WTO DAIRY COUNCIL SUSPENDS MINIMUM EXPORT
PRICES FOR ALL DAIRY PRODUCTS
TheWTO International Dairy Council hassuspended theminimum export prices forskimmed,
whole andbuttermilk powders, butter andbutter oil,andcheese, effective fromnoontoday, 18October.
Having suspended theoperation oftheAnnex totheInternational Dairy Agreement, theparties tothe
Agreement arenowfreetoselldairy products below thepreviously established floor prices. These
floor prices were, respectively, (perton,f.o.b.): US$1,200 forskimmed milkpowder; US$1,250
forwhole milkpowder; US$1,200 forbuttermilk powder; US$1,625 foranhydrous milkfat(butter
oil); US$1,350 forbutter; andUS$1,500 forcheese.
TheInternational Dairy Agreement isoneofthefourplurilateral agreements resulting from
theUruguay Round negotiations. Unlike theother WTO agreements, membership intheplurilateral
agreements islimited tothose governments which haveexplicitly accepted them. TheInternational
Dairy Agreement isaslightly modified successor totheInternational Dairy Arrangement, which had
beenineffect since 1980. However, duetoexpectations thattheresults oftheWTO Agreement on
Agriculture willaddress someoftheconcerns which initially ledtotheestablishment oftheInternational
Dairy Agreement, andthefactthatemerging technologies haveopened other avenues forinformation
exchange, anumber ofmembers oftheprevious Dairy Arrangement decided nottojointhenew
International Dairy Agreement. ThenewAgreement currently has12signatories (theEuropean
Community counting asone), notallofwhich haveyetfullyratified theiracceptance.
TheInternational Dairy Council considered thatthelimited membership intheAgreement,
andinparticular thenon-participation ofsome major dairy exporting countries, made theoperation
oftheminimum price provisions untenable. Theminimum prices have been suspended until
31December 1997. TheInternational Dairy Council willcontinue toreview theworld market situation
fordairy products atitsregular meetings.
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Note toEditors:
TheInternational Dairy Agreement entered intoeffect on1January 1995. Itreplaces the
International Dairy Arrangement, which hadoperated since1980. Asof16October 1995, thefollowing
wereparties totheInternational Dairy Agreement: Argentina, Bulgaria, theEuropean Community (15),
Japan, NewZealand, Norway, Romania, Switzerland andUruguay. Brazil, Chad andHungary have
signed theAgreement butnotyetratified theirmembership.
Theprimary objectives oftheAgreement, likeitspredecessor, aretoadvance theexpansion
andliberalization ofworld trade indairy products under asstable aspossible market conditions, on
thebasis ofmutual benefit toexporting andimporting countries, andtofurther economic andsocial
development indeveloping countries. Inadopting these objectives, theeconomic importance ofmilk
anddairyproductstomanycountrieswasrecognized,aswellastheneedtoavoidsurplusesandshortages
andtomaintain prices atanequitable level. AnInternational Dairy Council andaCommittee onCertain
MilkProducts wereestablished toadminister theAgreement. Previously threeProtocols wereannexed
totheInternational Dairy Arrangement; under theInternational Dairy Agreement these havebeen
combined intoasingle Annex onCertain Milk Products.
TheAnnex establishes minimum export prices forskimmed milkpowder, whole milkpowder,
buttermilk powder, anhydrous milkfat,butter andcheese. Theminimum export prices arefixed for
defined pilotproducts andtakeintoaccount thecurrent market situation, dairy prices inparticipating
producing countries, theneedtoensure equitable prices toconsumers, andthedesirability ofmaintaining
aminimum return tothemostefficient producers inorder toensure stability ofsupply overthelonger
term. TheDecision oftheCouncil on17October 1995 suspended theoperation oftheAnnex, thus
theminimum price provisions. Minimum export prices forparticular products (butter andbutter oil)
havebeensuspended inthepastforlimited periods oftime.
TheDecision bytheCouncil alsosuspended theoperation oftheCommittee, whose function
wastoreview theapplication oftheAnnex. TheCouncil willcontinue tomake anevaluation ofthe
market situation twice ayearbased onbackground information prepared bytheWTO Secretariat and
review thefunctioning oftheAgreement.
END