After announcing its intent to enter talks with the European Union (EU) on a bilateral trade pact, the Office of the U.S. Trade Representative (USTR) is now developing negotiating objectives and seeking industry input. In comments filed this week with the USTR, IDFA said these objectives must address U.S. dairy’s widening import disadvantage, the EU’s high tariffs on American dairy products and the EU’s aggressive monopolization of the use of several cheese names.
IDFA said the EU has immense potential to be a large export market for the U.S. dairy industry but the United States currently faces a trade deficit with its European trade partners. In 2017, the EU exported approximately $1.5 billion in dairy products to the U.S., but U.S. dairy companies only exported about $116 million in dairy products to the EU.
U.S. dairy exports that make it into the EU market still face high tariffs and other burdensome barriers to trade, specifically import licensing and certification requirements in the EU market, IDFA added.
Market Access
While IDFA said it welcomes a robust, reciprocal free trade agreement with the EU, it told USTR that its members are concerned that current trade talks between the U.S. and EU do not address agriculture. IDFA told USTR that it supports the U.S. government negotiating with the EU if the EU allows for market access for all industries and trade sectors.
It also stressed that EU dairy tariffs are higher than the average U.S. dairy tariff, making it more difficult for the U.S. to obtain preferential access to their agricultural market.
Geographical Indications
IDFA also stressed that the proposed bilateral pact should address the EU’s inappropriate use of geographical indications (GIs), specifically attempts by the EU to reserve exclusive rights to generic cheese names.
The use of these product names has been commonly used in the United States and is considered a de facto barrier to trade.
Recently, the EU finalized pacts with Japan and Mexico which monopolized several common agriculture product names. Because of this, many U.S. cheese exporters cannot sell common cheeses such as parmesan, feta, or asiago in these markets.
IDFA strongly urges the U.S. government to retaliate against any EU efforts to implement their GI system in the United States or in any other market prominent for U.S. cheese exporters.
Next Steps
Under Trade Promotion Authority (TPA), the administration will consult with congressional committees of jurisdiction and then publish a detailed summary of negotiating objectives on USTR’s website. TPA mandates that USTR publish these objectives at least 30 days before official negotiations begin.
For more information, contact Beth Hughes, IDFA senior director of international affairs, at bhughes@idfa.org.