November 13, 2020
Expanding opportunities for U.S. dairy exports has become extremely important, as growing sales overseas play an indispensable role in supporting the U.S. dairy sector and rural economy, according to the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC). Last month, the groups submitted to the U.S. Trade Representative’s (USTR) Office a detailed analysis of the intricate web of global trade barriers that are hampering overseas dairy sales. Now, they have released an Executive Summary to better inform and guide the work of the incoming Administration and other policy-makers.
The detailed submission was created as part of USTR’s annual call for input to inform its "National Trade Estimate Report on Foreign Trade Barriers." It outlined nearly 40 pages' worth of various challenges and opportunities facing U.S. dairy exports in more than 30 foreign markets.
“Exports are essential to the economic survival of our industry, and it is important U.S. trade negotiators fully understand all of the trade-distorting tricks used to keep high-quality U.S. dairy products out of global markets,” USDEC president and chief executive officer Tom Vilsack said. “The USTR has worked hard to address many of these barriers, and USDEC members have benefited from our broad approach to handling issues ranging from trade policy to regulatory hurdles. We stand ready to continue our work alongside USTR and [the U.S. Department of Agriculture] to address these and future trade barriers.”
More than $6 billion of dairy products were exported in 2019, accounting for 15% of all U.S. milk production, with more potential to serve consumers overseas and create dairy jobs at home.
“Our comments to the USTR provide a road map for dozens of opportunities to create a more level and consistent global playing field for the U.S. dairy sector,” NMPF president and CEO Jim Mulhern said. “The best avenue to stamp out many of these trade tactics that disadvantage American-made dairy products is to strongly convey the message that foreign restrictions on U.S. agriculture must end and that new trade agreements that dismantle trade barriers and put America’s dairy industry on a level playing field are necessary.”
The industry’s submission dedicated the most attention to key markets where trade barriers are limiting U.S. market access, including in China and Europe. Foreign countries use policies including high tariffs, retaliatory duties, geographic indications, import licensing and unscientific health requirements to keep U.S. goods at bay. The submission also focused on the importance of enforcing hard-won gains under existing free-trade agreements, particularly the U.S.-Mexico-Canada Agreement (USMCA).
For the North American pact, the groups said careful monitoring and enforcement of USMCA will be necessary to ensure that the U.S. dairy industry is able to reap the full benefits of the progress it made to break down trade barriers.
Regarding China, the third-largest export market for U.S. dairy products, imported more than $373 million in 2019 despite the dire impact of China’s retaliatory tariffs. Even with the U.S.'s Phase One trade agreement with China, the groups said targeted tariff relief and a focused pursuit of greater dairy sourcing from the U.S. is necessary moving forward.
While the Phase One agreement with Japan made progress to expand market access for U.S. dairy products and secured imported market access parity on various tariff lines, the groups said a comprehensive free trade agreement is still necessary to address remaining market access needs and institute the non-tariff commitments necessary to help provide for dependable trading conditions in the future.
Overall, NMPF and USDEC said the U.S. should prioritize trade deals most likely to yield net positive benefits for dairy and agriculture, such as with the U.K. and key Asian markets, including those in Southeast Asia.
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