The Office of the U.S. Trade Representative (USTR) last week issued its annual National Trade Estimate Report, outlining many tariff and non-tariff barriers, including protective measures and technical obstacles to trade, that U.S. dairy companies face around the world. Published annually, the 540-page report highlights significant foreign barriers to U.S. exports, U.S. foreign direct investment and U.S. electronic commerce.
In October, IDFA submitted comments to USTR highlighting trade impediments the U.S. dairy industry faces specifically in Canada, China, the European Union, Japan, India, Indonesia, Mexico, Russia and the United Kingdom. Several of these issues highlighted in IDFA’s comments were captured in the report as detailed below.
Canada was featured prominently in the report, which identified several burdens to U.S. dairy trade:
- Restrictive regulations on compositional standards for cheese that discriminate against U.S. dry milk protein concentrate;
- Canada’s supply management system that subjects cheese and butter to tariffs of 245 percent and 298 percent, respectively, for over-the-quota products; and
- Canada’s expansions to the Special Milk Class Permit Program, which unfairly incentivizes the purchasing of domestic ingredients over imports.
The report also noted Canada’s retaliation against U.S. products as a result of the Section 232 tariffs placed on imports of steel and aluminum from Canada.
With regard to dairy, the report mentioned China’s ongoing implementation of its 2015 Food Safety Law, which includes registration requirements for exporter facilities and products such as dairy and infant formula. This process is burdensome and time-consuming for U.S. dairy exporters.
The report also highlighted China’s imposition of retaliatory tariffs following U.S. action under Section 301. Essentially all U.S. dairy products are now subject to additional tariffs ranging from 10 percent to 25 percent.
The report identified several challenges for U.S. dairy exporters in the EU market:
- Expanded protection guaranteed for geographical indications (GIs) include many common food names;
- Country of origin labeling requires an indication of the origin of milk products as well as the origin of milk, meat and wheat used as ingredients in certain processed foods;
- Somatic cell count requirements hinder U.S. dairy trade by adding unnecessary costs; and
- Burdensome and complex certification requirements also hamper trade efforts.
Barriers faced by U.S. dairy companies in other countries also were included in the report, such as rules in India that require dairy products to be derived from animals fed a specific diet, and Russia’s ban on the importation of U.S. dairy products since 2010.
The full report is available here.
For more information contact Beth Hughes, IDFA senior director of international affairs, at firstname.lastname@example.org.