Trade News is a periodic update that provides a concise compilation of current trade happenings and their impact on the dairy industry. This week's column by Beth Hughes, IDFA director of international affairs, discusses progress on Trade Promotion Authority, negotiations surrounding the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP), the antidumping and countervailing duties cases involving Mexican sugar, and country-of-origin labeling (COOL).

Trans-Pacific Partnership (TPP)
Negotiations on market access are still underway, particularly between the United States and Japan on several sensitive products – dairy, rice, sugar, barley and wheat, pork and beef.

Negotiators from the twelve TPP countries met in early December in Washington, D.C. IDFA met with representatives from several key TPP countries, including Australia, Canada, Japan and New Zealand, to discuss the U.S. dairy industry’s position and priorities in the negotiations.

Countries have been meeting bilaterally since the December meeting and are planning to hold an informal round January 26 - February 1 in New York City. A ministerial is likely to be held in late February or early March. Most countries have publicly said they are looking to close the negotiations before the end of 2015.

Transatlantic Trade and Investment Partnership (T-TIP)
The new European Union Trade Commissioner Cecilia Malmstrom and U.S. Trade Representative Michael Froman met in December to chart a path forward for the T-TIP negotiations.

The eighth round of negotiations between the U.S. and the EU will be held February 2-6 in Brussels, Belgium. This round will be a fresh start for T-TIP negotiations, which have been lagging as of late.

Top priorities for IDFA in the T-TIP negotiations include a reduction in tariffs and non-tariff barriers, stronger sanitary and phytosanitary measures, and protection for U.S. exporters to continue marketing generic cheese names.

Trade Promotion Authority (TPA)TPA is an important piece of legislation that must be renewed in order for completed trade agreements to move through Congress. TPA only allows an up-or-down vote in Congress on the final agreement with no amendments. TPA legislation was last enacted in 2002 and lapsed in 2007.

In his State of the Union address this week, President Barack Obama asked Congress to give him “trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.” New Senate Finance Chairman Orrin Hatch (R-UT) has been working with Ranking Member Ron Wyden (D-OR) and House Ways & Means Chairman Paul Ryan (R-WI) to introduce a TPA bill in the next month or so.

IDFA has been working with the Trade Benefits America coalition to educate and gain support for TPA. A letter from the coalition was sent in mid-January to Congressional leaders urging the passage of bipartisan TPA legislation early this year.

Sugar Antidumping and Countervailing Duties Cases
Several IDFA members have received questionnaires from the International Trade Commission (ITC) regarding Mexican sugar imports and the antidumping and countervailing duty investigations that were conducted by the U.S. Department of Commerce last year. ITC is attempting to determine if the suspension agreements, recently finalized by Commerce, the Mexican government and Mexican sugar importers, will fully resolve and rectify the Commission’s preliminary determination of injury.

The investigations started last March when several U.S. sugar groups filed a petition with ITC and Commerce claiming the government of Mexico was subsidizing and dumping sugar in the United States. The petition requested countervailing duties and antidumping duties to be placed on imports of sugar from Mexico.

Commerce suspended its investigation late last year after reaching agreement with the government of Mexico and Mexican sugar producers. The ITC is continuing its probe, however, because two companies have exercised their rights under U.S. statute to request a continuation of the investigation.

IDFA reminds members who received the 29-page questionnaire that response is mandatory and due by January 28. ITC estimates that it will take each company an average of 25 hours to complete the detailed form.

Members who have questions or need help filling out the questionnaire may contact Clay Hough, IDFA senior group vice president, at chough@idfa.org, or Beth Hughes, IDFA director of international affairs, at bhughes@idfa.org.

Country-of-Origin-Labeling (COOL)
Mandatory Country of Origin Labeling (COOL) rules require most retailers to provide country-of-origin labeling for fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, meat and poultry. This issue is of concern to the U.S. dairy sector because of potential retaliation against U.S. dairy exports.

Less than one year after the COOL rules took effect, both Canada and Mexico challenged the rule for muscle cuts of meat at the World Trade Organization (WTO), arguing that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market. The WTO found the United States to be in noncompliance with its international trade obligations.

The FY 2015 Omnibus Appropriations bill, filed with the House Rules Committee on December 9, included language addressing COOL. On December 13, the Senate voted 56-40 to send the so-called CRomnibus (CR for “continuing resolution” and “omnibus” used to describe a bill with multiple provisions) bill, which kept the COOL language intact and included a continuing resolution to keep the government operating, to President Obama for his signature.

IDFA has joined the COOL Reform Coalition to advocate for U.S. compliance with WTO obligations and urge Congress to authorize and direct the Secretary of Agriculture to rescind elements of COOL that have been determined to be noncompliant. If the United States does not comply, Canada and Mexico will likely retaliate with high tariffs on a wide variety of U.S. agriculture imports, including U.S. cheese. Retaliatory tariffs could be imposed as early as summer 2015 if COOL is not reformed.

For more information, visit www.coolreform.com.

World Intellectual Property Organization (WIPO)
Geographical indications (GIs) remain a top priority for IDFA with regard to our current and future trade agreements. The EU has been aggressively targeting U.S. dairy export markets to secure protection for GIs of cheese names that are considered generic by the U.S. dairy industry as well as other international dairy industries.

One area of concern is within the World Intellectual Property Organization (WIPO), where expansion of international protections for geographical indications by revising the Lisbon Agreement is under consideration. Revisions are scheduled to be taken up at the Diplomatic Conference in May, but non-parties to the Lisbon Agreement are currently not permitted to fully participate.

Although the United States is a member of WIPO, it is not a member of the Lisbon Agreement. The Consortium for Common Food Names (CCFN), of which IDFA is a founding member, is advocating for an open discussion to include all WIPO members, not just Lisbon Agreement members at the Diplomatic Conference.

U.S.-China Joint Commission on Commerce and Trade (JCCT)
In December, the United States and China participated in the U.S.-China Joint Commission on Commerce and Trade (JCCT). One result from the JCCT lays out common principles for how geographical indications should be handled, as well as a commitment to future dialogue on GIs between the two countries. In a joint press release, IDFA and other dairy groups praised the commitment to stronger protections for common food names between the two trading partners.

Cuba
In December the President announced a set of changes in U.S. relations with Cuba to include an easing of travel and trade restrictions. One of the biggest impediments to trade with Cuba was the lack of financing to allow for payment in a manner that it is commercially viable.

A reinterpretation of the term “cash in advance,” meaning that Cuba must pay in advance for the U.S. agricultural goods that it imports, has modified the cash-in-advance restriction to make it easier for agricultural producers to export their goods to Cuba. This change will remove costly and unnecessary burdens on U.S. agricultural exporters by allowing payment to pass from Cuba directly to U.S. banks in place of the current requirement that payments be routed through banks in other countries.

IDFA joined the U.S. Agriculture Coalition for Cuba (USACC) with the goal to expand Cuba as a market for U.S. food and agriculture exports and address liberalizing trade between the United States and Cuba. The coalition will work to end the embargo and allow for open trade and investment.

Earlier this month, IDFA issued a joint press release with other dairy groups to support coalition efforts to facilitate U.S. dairy exports to Cuba.

For more information, contact Beth Hughes, IDFA director of international affairs, at bhughes@idfa.org.