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Dairy industry wants trade to Canada fixed, Mexico unharmedDairy industry wants trade to Canada fixed, Mexico unharmed

The Trump administration begins modernizing NAFTA.

June 12, 2017

3 Min Read
A NECESSITY: Without NAFTA, the U.S. would lose nearly $2 billion annually in dairy exports, and tens of thousands of farming and manufacturing jobs in communities across the country, according to Michael Dykes, International Dairy Foods Association president.

The U.S. dairy industry applauded Robert Lighthizer, the newly confirmed U.S. trade representative, for taking quick action under the Bipartisan Congressional Trade Priorities and Accountability Act (TPA) to begin the process of modernizing the North American Free Trade Agreement.

In a notification letter sent to Congress, Lighthizer outlined areas of the agreement that are either outdated or missing, several of which are important to the U.S. dairy industry, and reaffirmed a commitment to pursuing the trade priorities outlined by TPA, including goals related to market access and curbing the abuse of geographical indications. He also emphasized the importance of effectively implementing and aggressively enforcing the commitments made by Mexico and Canada, two of the U.S. dairy industry’s top trade partners. 

The National Milk Producers Federation, the U.S. Dairy Export Council and the International Dairy Foods Association have urged President Donald Trump, administration officials and legislators to focus on maintaining what has worked well, such as trade with Mexico, the top market for U.S. dairy exports. The dairy groups have also continued to call for improving market access to Canada and tackling that country’s expanding list of protectionist policies and other barriers to U.S. dairy exports.

“We agree with Ambassador Lighthizer that the current NAFTA agreement has areas upon which we can build as the renegotiation process begins, including the market we have developed in Mexico,” says Jim Mulhern, president and chief executive officer of NMPF. “Obviously, dairy trade with Canada — where we continue to face 200% to 300% tariffs and a slew of nontariff policies that distort dairy trade — is an entirely different story, and we need to address it as part of these talks. Central to any successful NAFTA negotiations will be changes to Canada’s new policies designed to harm bilateral trade and dump their structural dairy surplus on the world market.”

Former U.S. Ag Secretary Tom Vilsack, now president and CEO of the USDEC, encourages the Trump administration to get started modernizing negotiations with Mexico and Canada.

“Mexico is our only $1 billion dairy market; finding a replacement for sales that are so critical to supporting tens of thousands of jobs across this country is no small task, so preserving it is essential,” Vilsack says. “At the same time, numerous opportunities exist to shore up open trade and further deepen it with our NAFTA partners, such as addressing Canada’s tariff and nontariff constraints on dairy trade, instituting stronger SPS [sanitary and phytosanitary] commitments, and ensuring that geographical indications are not used to restrict the use of common names.”

Michael Dykes, DVM and IDFA president and CEO, agrees with Vilsack.

“As an industry, we fully support the administration’s call to modernize NAFTA,” Dykes says. “Without this trade agreement and the market access it provides, the United States would stand to lose nearly $2 billion annually in dairy exports, and tens of thousands of farming and manufacturing jobs in communities across the country. The issues of geographical indications, intellectual property rights and ways to resolve sanitary and phytosanitary measures are also of keen interest to the dairy industry. We look forward to working with Ambassador Lighthizer and other Trump administration officials during the renegotiation process to provide helpful data and input.” 

Farmers are hoping NAFTA can be updated without blowing up the trade agreement. Their futures and the price of milk are riding on a successful outcome.

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