Tariffs

Challenges to International Dairy Trade

Despite the important achievements of the Uruguay Round agreements, extensive subsidies, high tariffs and numerous non-tariff barriers remain in most countries, inhibiting or prohibiting competition from more efficient dairy product competitors. Comparison of tariff barriers in the dairy sector is made difficult by the fact that tariff rates are often not ad valorem rates, but rather specific or compound rates whose relative value varies depending on market prices.

Tariff-rate quotas (TRQs) are prominent in many countries that are major dairy producers and had import quotas in force prior to the implementation of the Uruguay Round agreements. In most of these countries, the over-quota tariff rate is a prohibitive rate. In addition to the size of the tariff rates, import licensing rules and procedures associated with tariff-rate quota administration often pose additional barriers to effective market access even for the limited in-quota quantities.

In addition to tariff barriers, an assortment of other regulatory barriers can also impede U.S. dairy exports in many markets, including unreasonable packaging and labeling requirements, pre- and post-shipment testing and inspections, mandatory recipe and manufacturing information, shipments held at port of entry for lab testing or other sanitary examinations, unreasonably short shelf-life provisions, pre-import registration and licensing requirements, and limitations on internationally approved colors and food additives.

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