Talk across the Pacific could see the United States government review dairy subsidies just as European Union did late last week.

New Zealand’s Trade Minister Tim Groser welcomed news the EU had scrapped export subsidies for dairy products.

“In response to this market improvement, the European Union has been gradually scaling back its export subsidies since late October. The removal of remaining export subsidies sends an encouraging message to the international dairy market and I welcome that,” he said.

Despite local media and political outrage, the reintroduction of American dairy subsidies really shouldn’t come as any surprise.

We’ve been expecting it since the recession kicked into gear, and the EU's reintroduction of export subsidies in January pretty much sealed the deal.

It was a case of when, not if.

Dairy Australia is claiming that US farmers are putting extreme stress on the Obama administration to reintroduce export subsidies, following in the EU’s footsteps.

Dairy Australia says that given that the Doha rounds of the World Trade Organisation are unlikely to produce any universal free-trade deal before 2010, there is no pressure on the EU or the US to reform and abolish any export subsidies.

“It is likely that the US will follow the EU lead and reintroduce export subsidies for milk powder,” the report states.