The U.S. Trade Representative and the U.S. Department of Agriculture on Wednesday announced plans for an agreement with Brazil that will not raise tariffs on a number of U.S. dairy products. The compromise came after months of anticipation that Brazilian officials would execute a tariff list affecting $269 million worth of goods in response to a long-standing dispute over the U.S. cotton program.
"Our trade relationship with Brazil is important, and the proposed deal would protect dairy exports," said Clay Hough, IDFA senior group vice president.
IDFA has worked with the Brazil Trade Action Coalition (BRAZTAC) over the past few months to inform U.S. officials of the detrimental effect these tariffs would have on a number of American exports, including milk powder with less than 1.5 percent fat and whey.
Dairy exports to Brazil have grown exponentially since 2004, reaching more than $24 million in 2008. The proposed retaliatory tariffs would have affected around $10 million worth of these exports, according to U.S. Department of Agriculture figures for 2008.
Under the agreement, U.S. officials agreed to establish a fund for providing technical assistance and capacity building to Brazil. The fund will continue until the next Farm Bill is passed or a joint solution to the cotton dispute is reached.
The deal also changes the GSM-102 Export Credit Guarantee Program, which guarantees credit extended by U.S. banks to foreign banks for international purchases of American agricultural products, and takes steps toward determining whether Brazilian beef can be imported to U.S. markets.
IDFA will continue to monitor progress of the compromise as it is implemented. For more information, contact Katie Sparrow, IDFA manager of international affairs, at (202) 220-3507 or email@example.com.