By Becky Rasdall, vice president, trade policy and international affairs, IDFA

Last week’s World Trade Organization (WTO) Ministerial Conference (MC13) ended without significant progress on WTO reform for agriculture, a binding dispute settlement system, or improved market access for U.S. dairy exporters—an unsurprising result that reflects the lethargic U.S. trade policy agenda. As we look ahead to this election year, and most likely a rematch of two previous Administrations, can U.S. dairy really expect a future Administration to stick to the same trade policies we’ve been seeing? 

What we see playing out so far is each frontrunner presidential campaign leaning into the trade policies of their first Administrations. Where President Biden has pursued a worker-centered trade agenda that eschewed traditional trade negotiations, one might expect much the same for a second Biden Administration. Given the current discord among democratic officials on what the trade agenda should look like, even if a more progressive trade agenda favoring full and comprehensive preferential trade agreements were proposed under a second Biden Administration, would there be enough party unity to advance it? Meanwhile, former President Trump continues to push an agenda of placing additional tariffs on imports, further reforming trade relations with China, and continuing to use non-trade policy tools to leverage partners into trade negotiations with the United States.

What is more concerning is that both Administrations would potentially face a review of USMCA. That agreement, which is critical for agriculture and U.S. dairy, faces a mandatory review in the coming years and opens the opportunity for any of the participating governments to object to its provisions. Given some of its failures – not the least of which is the lack of meaningful dairy access to Canada – real danger exists that either Administration may seek to judge USMCA as yet another antiquated trade tool that must be abandoned. That prospect would mean damaging economic repercussions for U.S. dairy. 

With this outlook in a U.S. presidential election year, where does that leave U.S. dairy? Our industry relies heavily on export growth to funnel its growth in production. Without exports, dairy will back up at every stop in the supply chain all the way back to farm levels, resulting in milk being dumped. This reality brings critical clarity to the U.S. trade agenda and begs the question: if we go eight years without a trade agenda, additional tariff reductions, or access to new markets, can U.S. farms, producers, and processors realistically sustain their businesses? Can we guarantee an outlet for all that milk? Cows are milked 24 hours a day, 7 days a week, and that production can’t be turned off unless the farm goes out of business and sells the cow. So, where does the trade agenda leave U.S. dairy? 

It leaves us with a call to action. There are those in Washington who would say the time of tariff-reducing trade negotiations is in the past and it is time to move on. In dairy, we say we can’t afford for such agreements to become a by-gone era. IDFA, like our member processors and the farmers they service, has no other option but to continue to demand liberalized trade – specifically export competitiveness through market access – from Members of Congress and the Administration alike. We do not service an industry that can afford to allow market access to become antiquated trade policy. There is no greater time than the present to take action – before the dairy industry contracts, before we lose more markets to competitors like New Zealand who recently gained zero tariff access to China, and before we continue on a spiral of protectionist trade policies. IDFA therefore urgently calls on Members of Congress and the Administration to move forward with serious and comprehensive consultations on a trade reform legislative package that meets the needs of U.S. dairy. Such a package could include improved and structured congressional consultations on trade agreement texts that yield greater congressional confidence in negotiations. It could also include the option to fast-track an agreement in portions, or fast-track agreements with certain target countries, such as those that would help limit China’s influence in Southeast Asia, akin to the Indo-Pacific Economic Framework’s objectives.  Certainly there are many trade reform ideas to consider, but in U.S. dairy our urge is simple: reform begins by taking action.

IDFA Staff Expert

Becky Rasdall

Senior Vice President, Trade and Workforce Policy