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Congress Speaks Out on Trade Pacts and Dairy

Apr 27, 2016

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 the Trans-Pacific Partnership (TPP). the Transatlantic Trade and Investment Partnership (T-TIP) and trade options with Cuba.


Trans-Pacific Partnership

IDFA has joined the U.S. Coalition for TPP, a broad group of trade associations and companies that support the agreement that will govern trade in the growing region of the Pacific Rim. The coalition recently launched an educational effort among members of Congress to deliver the message that TPP needs to be passed this year.

IDFA also is working with a smaller group of food and agriculture trade associations and companies in support of TPP. IDFA signed a letter, along with more than 200 organizations, that urged Senate and House leaders to approve the agreement this year.

Although IDFA supports TPP, concerns remain regarding how it will be implemented and enforced. IDFA sent a joint letter with the National Milk Producers Federation and the U.S. Dairy Export Council to Members of Congress, asking them to address a number of critical implementation and enforcement issues that are key determinants in how the agreement is likely to work in practice. Specifically, the letter pointed to Canada and its track record for limiting U.S. dairy exports and requested clarity on the administration of Japan’s TPP-wide tariff-rate quotas, which should include import licensing and the operation of safeguards. The letter also addressed how TPP will enforce geographical indication (GI) commitments and implement U.S. commitments.

Transatlantic Trade and Investment Partnership

The 13th round of negotiations is being held this week in New York City. On Thursday, industry stakeholders will have the opportunity to present to the negotiators on both sides.

Unfortunately, it seems that little to no progress is being made on the agriculture front. The European Union is still holding the U.S. hostage on a majority of tariff lines on agriculture products until it gets what it wants on geographical indications. Many of the tariffs that the EU has said it will eliminate are for products the U.S. doesn’t produce.

A recent report by the U.S. Department of Agriculture stated that, in 2015, the U.S. ran a record $12 billion trade deficit in farm and food products with the EU, up 15 percent from 2014. Dairy has a rather large trade deficit, with U.S. exporters shipping about $100 million in dairy products while the EU sends a $1 billion worth of dairy products to the U.S.

IDFA has been meeting with members of Congress and the U.S. negotiators about concerns on the tariff and non-tariff barriers in place, as well as the EU’s overreach on geographical indications. A bipartisan group of 26 senators sent a letter to the U.S. Trade Representative urging U.S. negotiators to address the needs of agriculture – including key dairy issues – in any free trade agreement with the European Union.

Cuba 

IDFA joined more than 60 other food organizations and companies in calling for lifting the trade embargo with Cuba and approving funding for USDA to add staff positions “on the ground” in Cuba. In a letter to the leaders of the Senate and House subcommittees that represent agricultural interests on the Appropriations Committees, the organizations said housing USDA staff members within the U.S. Embassy in Havana would make the transition process run more efficiently, help U.S. companies regain a prominent export role in Cuba and advance U.S. agricultural interests.

The U.S. International Trade Commission (USITC) released a report, "Overview of Cuban Imports of Goods and Services and Effects of U.S. Restrictions,” that found U.S. agriculture exports to Cuba could increase if U.S. trade restrictions were lifted. The report touches on dairy, mentioning that the United States has not exported dairy products to Cuba since 2011. If U.S. restrictions are removed, the report’s authors believe milk powder and fluid milk would be viable U.S. dairy exports.

Dairy is a staple to the Cuban diet but domestic production cannot meet demand. Being situated so close to Cuba, the United States has a natural advantage. Currently the United States cannot extend credit or conduct payments in a commercially viable way, which is one of the reasons IDFA has joined a coalition to end the embargo and increase U.S. agriculture sales to Cuba.

 
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