Dykes Highlights Dairy Trade Priorities at USTR Roundtable

(IDFA) –  IDFA joined 14 other leaders of food and agriculture organizations this week at a roundtable discussion hosted by Ambassador Robert Lighthizer, the U.S. Trade Representative. The leaders met to discuss the administration’s trade policy for agriculture and highlight their trade priorities.

Michael Dykes, D.V.M., IDFA president and CEO, provided brief remarks about the importance of preserving the U.S. dairy market with Mexico and said all available tools should be brought to bear to address the Canadian milk pricing issues beginning with the North American Free Trade Agreement (NAFTA) renegotiation and ending with a World Trade Organization case, if necessary, or even a combination of the two.

He also stressed the need to start the NAFTA renegotiation with nothing less than the expanded market access granted under the Trans-Pacific Partnership (TPP), and to build on that model. IDFA provided specific suggestions to USTR on how to expand on the TPP results.

In closing comments, Dykes stressed the need to develop new bilateral trade agreements with other countries, starting in the Asia-Pacific region.

NAFTA

“Mexico is the number one export market for U.S. dairy, accounting for 25 percent of our total dairy exports,” Dykes said in his prepared remarks. “The United States has a 73 percent market share of Mexico’s dairy imports, and we need to ensure that a renegotiation of the North American Free Trade Agreement (NAFTA) preserves this important market.”

Shifting to Canada, Dykes explained that the U.S. dairy industry “has been waiting for 25 years for market access in Canada.” Dairy products have faced tariffs of 200 percent to 300 percent for years, he added, noting that “now we are experiencing new problems with Canada’s use of its new Class 7 milk to undercut skim milk powder prices on the thinly traded international market.”

He shared the graph below to demonstrate the cumulative effect that Canadian skim milk powder exports have had on the world market.

Bilateral Agreements

Dykes also raised the importance of simultaneously forging new trade agreements, starting with the emerging economies of the Asia-Pacific region, where dairy consumption is rising rapidly.

He gave examples of other dairy exporters that are expanding their global reach, including the European Union, which recently signed bilateral trade agreements with Japan and Vietnam and is pursuing agreements with India, Indonesia and Malaysia. The Australian government is also pursuing agreements with India and Indonesia.

“High-quality U.S. dairy products can be competitive in any market around the globe, provided they have access to the same tariff rates and rules as our competition,” he said.

In closing, Dykes said, “IDFA stands ready to work with you to improve trade opportunities for U.S. dairy and in the NAFTA renegotiation and other trade agreements you may initiate.”