The Congressional Research Service (CRS), a nonpartisan research agency within the Library of Congress, last week highlighted the success of U.S. dairy exports in North America and identified areas for agricultural growth in its report, “The North American Free Trade Agreement (NAFTA) and U.S. Agriculture.” The report was commissioned to outline the history of the trilateral agreement, the outcomes since its enactment and areas for improvement in the renegotiation regarding the U.S. agriculture sector.
The U.S. dairy industry was featured prominently throughout the report as both a success, as a top export commodity for the United States and as an unfinished area of trade liberalization with regards to U.S.-Canada dairy integration.
“CRS reports are independent studies, and are frequently used by policymakers in Congress and government agencies,” said Beth Hughes, IDFA director of international affairs. “Dairy’s prominent placement in the report only corroborates IDFA’s position on what works in NAFTA and what needs to be modernized.”
Success for Dairy
Under NAFTA, Mexico has become the largest market for U.S. dairy products. Facts in the report support that the agreement have been especially beneficial for dairy processors in specific states. For example, the report noted that California’s “agricultural exports have grown substantially over the past decade, totaling more than $20.7 billion in 2015,” and that dairy products are now the state’s leading farm export to Mexico.
The report warned that a NAFTA withdrawal or failed renegotiation could be harmful to U.S. agriculture, because Mexico is looking to find alternative suppliers for some imported products, such as dairy, from New Zealand and Europe.
Areas to Modernize
Because tariff and quota elimination for dairy products to Canada is unfinished, the CRS report highlighted that removal of these barriers would help market integration between the U.S. and Canada.
In addition to the elimination of tariffs, the report also identified several ways to reduce barriers that align with key negotiating objectives of importance for the U.S. dairy industry. It included updating NAFTA’s sanitary and phytosanitary provisions, as well as addressing concerns over geographical indications and Canada’s new milk pricing policy that blocks U.S. exports of ultra-filtered milk and will facilitate dumping of Canadian skim milk ingredients on the world market.
More information on geographical indications can be found here and more information on Canadian trade policies can be found here.
Members with questions may contact, contact Beth Hughes, IDFA director of international affairs, at email@example.com.