The House Ways and Means Committee held a hearing last month on U.S. trade policy issues, focusing on pending trade agreements with Columbia, Panama and South Korea, as well as U.S.-China trade concerns and U.S. trade with countries in the Pacific Rim. IDFA submitted testimony highlighting the potential for U.S. dairy exports to fill the growing global demand gap and to create American jobs, provided the right domestic policies and trade pacts are in place.
Dairy exports have grown to represent more than 10 percent of all U.S. farm milk production. In 2010, the United States exported more than $3.7 billion worth of dairy products, an increase of 64 percent over 2009. Although Mexico and Canada remain the top export markets for U.S. dairy products, markets in China, Japan, the Philippines and Vietnam are showing tremendous growth.
"With the right policies, we are confident that this trend will continue," IDFA said in its testimony. "It is essential for Congress and the administration to remain ambitious in all three 'pillars' of the agriculture negotiations: market access, elimination of export subsidies and trade distorting domestic support."
Growth Management Program Could Create Trade Barriers
Referring to results from the 2009 Bain & Co. study on U.S. dairy export potential, IDFA said the U.S. dairy industry should become a "consistent exporter." To do so, legislators must avoid domestic policies that would create barriers to U.S. dairy exports. Specifically, IDFA mentioned the growth management, or milk supply-control, program currently being considered within the industry and by the House Agriculture Committee.
"If growth management, or price stabilization, programs are established here, they will undermine the efforts of this committee and the administration to increase exports through the National Export Initiative," IDFA said.
The National Export Initiative is an executive order signed last March by President Obama to enhance and coordinate federal efforts to help create American jobs by promoting exports.
Pact with South Korea Especially Important
In addition to market-oriented policies, IDFA called for quick action to approve the pending trade agreements with Colombia, Panama and South Korea. The testimony singled out the pact with South Korea as particularly important, because it would increase U.S. dairy exports and add 10,000 or more additional U.S. jobs throughout the dairy supply chain.
The testimony supported the Tran-Pacific Partnership, noting its importance in building regulatory coherence and addressing market-access issues in the region. IDFA also backed economic and trade discussions with China and renewed efforts to complete the World Trade Organization's Doha Development Round, which would strengthen international trade rules while opening markets for U.S. dairy products.
Members with questions may contact John Kelly, IDFA manager of international affairs, at jkelly@idfa.org or (202) 220-3507.