Administration, Congress Expect Trade Policy to Remain Stagnant

Following the Obama administration's halt to the U.S.-Panama Free Trade Agreement, U.S. Trade Representative Ron Kirk and Senator Judd Gregg (R-NH) gave indications that neither the current round of World Trade Organization negotiations nor the remaining free trade agreements would be addressed this year.

Ambassador Kirk noted U.S. willingness to engage in more substantive multilateral negotiations but admitted that no action would take place until at least 2010 when a coalition of 19 agricultural exporting countries, known as the Cairns Group, will meet. Kirk noted that while he did not foresee the current Doha round of negotiations concluding in the near future, he would like to set out a clear roadmap for progress with the WTO by August.

Since the Doha Development Round began in 2001, IDFA has supported the negotiation efforts as a means to foster growth in international trade and increase opportunities for U.S. dairy exporters. A successful Doha deal in 2010 would boost confidence for investors and business owners, because open markets and free-flowing trade would remain intact.

Citing a crowded Congressional calendar and domestic priorities, Gregg recently said that while the Administration recognizes that trade liberalization does carry some notable benefits, trade policy concerning Colombian and South Korean free-trade agreements would be put on the back burner for the time being.

Slight hope remains for the U.S.-Panama trade promotion agreement, which could possibly be put up for vote after the August recess, according to Rep. Henry Cuellar (D-TX) after a conversation with Ambassador Kirk.

IDFA has advocated the passage of the Panama, Columbia and South Korea trade agreements as a means to secure lucrative export markets and expand business opportunities for its members. This change towards a stagnant trade policy could exacerbate the declining export growth that dairy has experienced over the past year to the detriment of IDFA and its members.

IDFA Joins Dairy Alliance on Dairy Import Assessment Comments

In comments filed last week, the Alliance for Fair Dairy Promotion argued that the proposed dairy import assessment would increase the potential for trade retaliation directed against the dairy industry. The assessment could also increase costs for U.S. consumers and taxpayers, with no added benefits.

The joint filing builds on previous comments from the Alliance, of which IDFA is a member, and offers expanded explanations on new problems that the proposed rule presents. The comments were filed with the U.S. Department of Agriculture.

As required in the 2008 Farm Bill, the proposed rule implements a mandatory assessment of 7.5 cents per hundredweight of milk on dairy products imported into the United States. The new language also expands the rule to include producers in Hawaii, Alaska, the District of Columbia and Puerto Rico in the current assessment that U.S. producers in the 48 continental states pay to the National Dairy Promotion and Research Board for marketing. This assessment will remain 15 cents per hundredweight for all U.S. producers.

"The Alliance commends USDA and the USTR for making an effort to implement the proposed rule in compliance with U.S. trade obligations," the comments state. "However, as proposed, the rule fails to fully address the inequities that the import assessment raises between U.S. dairy producers and U.S. trading partners."

In its comments, the Alliance also opposes the new scope of products included in the assessment, which extends far beyond standard definitions of dairy products. The proposed rule includes tariff lines for items such as chocolate, cocoa, doughs and mixes.

IDFA will communicate with members on the progress of the proposed rule as updates become available.

Read the comments here.