Australia Complains of U.S. Wheat Subsidies

Australian Prime Minister Bob Hawke complained to Congress on Thursday that subsidized sales of American wheat overseas have cut so severely into Australian farm income that the issue threatens to tarnish the overall U.S.-Australian alliance.

“Australians must not be given reason to believe that while we are . . . first-class allies, we are in trade second-class friends,” Hawke said in a speech to a joint meeting of the House and Senate.

Hawke’s protest about U.S. subsidies for grain and some other agricultural exports came at an embarrassing moment for the United States. Just two days earlier, President Reagan returned from the economic summit in Toronto, where he called for an end to agricultural subsidies by all nations.

‘Bullet in the Head’

U.S. officials have said that Washington adopted its subsidy program to counter an aggressive effort by the European Economic Community to increase agricultural exports with cut-rate prices backed by generous subsidies to European farmers.

Talking to reporters after a White House meeting with Hawke, Reagan said the United States would “take fully into account” Australia’s interests when deciding which exports to back with subsidies. But he made no commitment to reduce the U.S. payments, which are aimed at encouraging exports.

Assistant Secretary of State Gaston Sigur said later that Reagan reassured Hawke that “it is not our purpose to damage the interests of non-subsidized agricultural producers such as Australia.” But he conceded that Reagan made the same promise two years ago.

Hawke did not dispute the U.S. argument that the American program is aimed at the Europeans. But he complained that Australia is like a person “who takes a bullet in the head and is told not to worry because it was meant for someone else.”

Statistical Disagreement

Since American wheat subsidies began, he said, the U.S. share of the world market has increased to 43% from 29%, the European Communities’ share declined slightly to 14% from 17%, and Australia’s share plummeted to 12% from 20%.

Sigur brushed aside Hawke’s figures. “They have statistics; we have statistics,” Sigur said. “These don’t necessarily agree.”

The United States has promised not to use subsidies to “invade” traditional Australian markets. But U.S. officials say there has always been a substantial overlap.