Contact: Marti Hogan
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(Washington, D.C. – June 12, 2017) Maintaining the U.S. dairy industry’s export market in Mexico is the number one priority for the International Dairy Foods Association when U.S. negotiators begin efforts to modernize and update the North American Free Trade Agreement (NAFTA) later this year. In comments filed today with the Office of the U.S. Trade Representative, IDFA also urged negotiators to push for greater market access to Canada by addressing the oppressive and expanding policies that limit U.S. dairy exports to that market.

Other areas in need of modernizing under the 23-year-old pact, IDFA said, include protections for common food names, enhanced sanitary and phytosanitary measures, enforcement guidelines for rules of origin and the removal of duty drawback restrictions that impede fair competition. 

After being a net importer of dairy products roughly a decade ago, the United States now benefits from a dairy trade surplus of more than $2 billion. In fact, approximately one days’ worth of milk production each week, more than 15 percent of U.S. milk production, is exported to other parts of the world.

“Since its implementation in 1994, NAFTA has created many opportunities for U.S. dairy products to thrive with consumers outside our borders,” said Beth Hughes, IDFA director of international affairs. “However, the agreement is certainly not perfect, and opportunities for improvement exist. We urge the USTR negotiators to maintain the existing market access for U.S. dairy exporters, especially in Mexico, and to modernize and update areas where the current agreement has failed to protect American interests and workers, particularly in Canada.”

Maintain Markets in Mexico

Mexico imported more than $1.22 billion of U.S. dairy products and ingredients in 2016 compared to only $250 million in 1993 before NAFTA was implemented. U.S. dairy exports to Mexico now account for one quarter of total dairy exports supporting nearly 30,000 American jobs.

Hughes pointed out that negative changes with Mexico could expose U.S. dairy exports to retaliatory tariffs and encourage Mexican officials to expand their existing network of free trade agreements with 45 countries in an effort to source dairy products elsewhere.

Peel Back Protectionist Policies in Canada

A number of Canadian dairy policy measures severely restrict market access for imported dairy products. Protective pricing that effectively blocks U.S. dairy imports and leads to dumping of milk powders on the world market must be addressed in the negotiations, along with extremely limited duty-free access and exorbitant over-quota tariffs that range from 200 percent to more than 300 percent in some cases, IDFA said.

“Time after time, Canada reverts to unfair trade practices to undermine U.S. dairy market access,” Hughes said. “This routine and harmful behavior must be urgently addressed in the renegotiation of NAFTA in order to prevent permanent loss of these markets. We need this national pricing policy to be eliminated, followed by clear-cut language to ensure that Canada does not institute future pricing programs and other non-tariff barriers that negatively impact dairy trade and jobs.”

Additional Issues

IDFA also urged negotiators to address geographical indications (GIs) and the way they are being employed by other countries in an effort to limit the fair use of common food names, such as parmesan and asiago, in U.S. export markets.

“It is essential that the NAFTA modernization efforts incorporate text on the issue of GIs and common names,” Hughes said.

More details about the issues, including sanitary and phytosanitary measures, rules of origin and duty drawback provisions that impede fair competition, are available here.

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The International Dairy Foods Association (IDFA), Washington, D.C., represents the nation's dairy manufacturing and marketing industries and their suppliers with a membership of nearly 525 companies within a $125-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA's nearly 200 dairy processing members operate more than 600 manufacturing facilities and range from large multi-national organizations to single-plant companies. Together they represent more than 85 percent of the milk, cultured products, cheese, ice cream and frozen desserts produced and marketed in the United States.