WASHINGTON, August 6, 2020—In a letter to U.S. Trade Representative Robert Lighthizer regarding trade negotiations between the governments of the United States and Kenya, the International Dairy Foods Association (IDFA) said a U.S.-Kenya agreement has the potential to provide tangible market access for U.S. food and agricultural exports to Kenya’s growing economy while also cutting into the European Union’s dominance over dairy exports to Kenya and sub-Saharan Africa. IDFA encouraged the Trump Administration to continue to pursue a trade agreement with the African continent’s seventh largest economy, but voiced its concern for Kenya’s protectionist measures over its dairy sector as well as a host of non-tariff barriers to trade that would limit U.S. dairy’s competitiveness. In addition, IDFA believes that the government of Kenya has allowed the EU to dominate Kenya’s dairy market. In 2019, the EU enjoyed 81% of the market compared to the U.S. share of <1%. The United States and Kenya must “work in tandem to achieve a level playing field free of barriers to trade,” said IDFA.
The letter goes on: “First and foremost, IDFA commends the Administration for embarking on these precedent-setting negotiations, including negotiating objectives that are consistent with or exceed those of the United States-Mexico-Canada Agreement (USMCA). IDFA believes global competitiveness is key to the U.S. dairy industry’s continued growth and the United States must take a proactive approach in developing market access opportunities that allow U.S. products to compete on a level playing field. To that end, with a population of roughly 1.3 billion people, the African continent represents significant market potential for U.S. dairy exports under equitable trade conditions. With no other full and comprehensive free trade agreement (FTA) in place in sub-Saharan Africa, the U.S.-Kenya negotiations have the potential to provide tangible market access for U.S. agricultural exporters to a growing economy while also leveling the competitive playing field for dairy exports to Kenya and beyond.”
IDFA Vice President for Trade Policy and International Affairs Becky Rasdall said, “IDFA appreciates the Administration’s efforts to unlock new opportunities and regions for the U.S. dairy industry and we encourage U.S. negotiators to continue pursuit of an agreement with Kenya that liberalizes its markets, ensures comprehensive regulatory reform, and delivers gold-standard commitments. IDFA supports the Administration’s goal to reach an agreement with Kenya and urges negotiators to focus on U.S. dairy access throughout the process.”
The letter to the U.S. Trade Representative highlights three priorities for the U.S. dairy industry in the U.S.-Kenya negotiations:
- Market Access: Seek ambitious tariff reductions, including for protected dairy products in Kenya, while seeking a simplified, trade facilitative entry of U.S. dairy imports into Kenya. Currently, Kenya maintains its highest tariffs on a range of agricultural products, including dairy at an average of over 50 percent, because it considers dairy to be “sensitive” products and uses tariffs to stabilize domestic prices.
- Sanitary and Phytosanitary (SPS) Measures: Seek SPS commitments that align with USMCA commitments, and that eliminate Kenya’s use of SPS measures to prevent the import of dairy products. For example, the SPS portion of Kenya’s “Dairy Industry Import and Export Regulations (2004, Revised 2012)” requires dairy imports into Kenya be physically tested for radioactivity and that the product has received not just one, but two pasteurization treatments, among many such requirements. It is imperative that U.S. negotiators ensure Kenya adopts SPS commitments that are consistent with the WTO and other, more recent agreements concluded by the United States.
- Capacity Building and Regulatory Reform: Pursue good regulatory practices commitments with Kenya, such as those in USMCA and promoted in multilateral fora such as the Asia Pacific Economic Cooperation (APEC). IDFA further encourages U.S. negotiators to undertake robust capacity-building efforts that focus on technical assistance for Kenya’s system of oversight, including regulatory reform, and the adoption and implementation of international guidelines, standards, and recommendations, such as those published by Codex Alimentarius.
The U.S. dairy industry, which supports more than 3 million jobs in the United States and pumps $620 billion into the U.S. economy, relies on trade agreements to open new markets and increase exports. After being a net importer of dairy products a decade ago, the United States now claims a dairy trade surplus of more than $2 billion and sends American dairy products to more than 140 countries. U.S. dairy exports nearly tripled since the early 2000s, and the United States became the world’s third-largest dairy product exporter behind New Zealand and the European Union (EU). Today, approximately one day’s worth of milk produced each week is exported, or roughly 15% of all production. As U.S. milk production continues to increase over the next decade, new trade agreements will become even more vital to the industry and the American economy. IDFA advocates for continued focus on new trade partnerships and pacts. Moreover, IDFA supports a market-principled approach to trade and advocates for the removal of unfair barriers so that U.S. dairy companies can compete on a level playing field.