Free Trade Agreements
U.S. Trade Representative Holds Hearing on TPP Negotiations
As a joint representative for NMPF and the U.S. Dairy Export Council, staff member Jaime Castaneda testified before a September 24, 2012 U.S. Trade Representative hearing about Canada’s participation in the Trans-Pacific Partnership (TPP) trade agreement negotiations. In his testimony, Castaneda outlined why the TPP negotiations, especially the participation of Canada, were a top priority for America’s dairy industry.
U.S. Dairy Industry Pursues Trade Negotiations with Canada, Russia
NMPF and the U.S. Dairy Export Council (USDEC) strongly supported Canada’s participation in the ongoing Trans-Pacific Partnership (TPP) trade agreement negotiations in the summer of 2012. Both groups agreed that since Mexico had been invited to join the talks, it only made sense for the third member of the North American Free Trade Agreement (NAFTA) to join as well. However, whereas Mexico and the United States already removed all dairy trade barriers between them, this was not the case with respect to trade between Canada and the United States—a situation which the two organizations said must be remedied.
According to the dairy groups, the U.S. government's approval of Canada’s participation in the TPP talks had been accompanied by a very clear understanding of U.S. expectations that all Canadian trade barriers against U.S. dairy products must be eliminated. This requirement was fundamental to gaining the groups’ support.
Meanwhile, legislation was introduced in the Senate in June 2012 to extend Permanent Normal Trade Relations (PNTR) to Russia. Senator Baucus (D-MT), Finance Committee Chairman; Senator John Thune (R-SD), International Trade Subcommittee Ranking Member; Senator John Kerry (D-MA), Foreign Relations Committee Chairman; and Senator John McCain (R-AZ), Armed Services Committee Ranking Member, introduced the bipartisan legislation in order to enable U.S. companies to expand exports to Russia when it joined the World Trade Organization (WTO) that year.
Russia was expected to complete the necessary administrative and regulatory changes and thereafter to actively join the WTO in August 2012. Those commitments included provisions relating to agricultural trade, which NMPF and USDEC believed would yield significant improvements in tariff levels, as well as in how Russia dealt with various regulatory requirements for imported dairy products.
Historic U.S.-Korea Free Trade Agreement Takes Effect
NMPF joined the U.S. Dairy Export Council (USDEC) in March 2012 to welcome the launch of the Korea-U.S. Free Trade Agreement (KORUS), the most economically significant U.S. free trade agreement (FTA) in nearly two decades. Thanks to this historic agreement, Korean consumers now have greater opportunities to access high-quality dairy products from the United States.
The first-year access alone that KORUS provided for dairy food products equated to 270 million pounds of U.S.-produced milk. The FTA provided immediate zero tariff access for whey for feed use, as well as duty-free access for a total of 16,000 tons of cheese, milk powders, whey for food use and other products. The agreement also called for most of Korea’s remaining tariffs to be phased out in 5-10 years.
Free Trade Agreements Win Congressional Passage; Dairy to Benefit with Greater Market Access
NMPF and the U.S. Dairy Export Council (USDEC) applauded the passage by the House and Senate of three free trade agreements (FTAs) with South Korea, Panama and Colombia. “We wish to thank President Obama and his trade team, and leaders in both houses of Congress, who worked hard in recent months to make these favorable votes possible,” said Jerry Kozak, president and chief executive officer of NMPF. Read the full press release issued by the two organizations on October 12, 2011.
NMPF Continues to Advocate for Passage of Pending Free Trade Agreements
Throughout July 2011, NMPF continued to advocate for the advancement of the three pending Free Trade Agreements (FTAs) with South Korea, Colombia, and Panama. However, it didn’t appear that Congress would take final votes prior to the upcoming August recess.
That month, both the House of Representatives and the Senate passed different versions of the FTAs. The Senate Finance committee approved a bill that included the Trade Adjustment Assistance (TAA), while the House Ways and Means Committee approved the FTAs on their own with a plan to move the TAA in parallel fashion through the House. There was still some concern on whether the House and Senate will be able to come to an agreement on the FTAs. However, several Republican Senators, including Sens. Roy Blunt (R-MO) and Rob Portman (R-OR), secured several other Republican Senators who were committed to vote for the current FTA agreements, including the TAA.
Ag Organizations Urge Passage of Stalled FTAs
Organizations representing a wide range of agricultural industries wrote a joint letter to President Obama on February 14, 2011 to encourage passage of the Colombia and Panama free trade agreements (FTAs). These FTAs were originally supported by the ag organizations in 2007. However, four years of trade benefits for U.S. farmers, ranchers, and food processors had been forfeited by U.S. inaction on these agreements, and competitor countries had taken advantage of this lapse to grab U.S. market shares.
ITC Testimony Outlines Negative Consequences of U.S.-New Zealand FTA
In testimony to the International Trade Commission (ITC), NMPF reiterated its opposition to the inclusion of U.S.-New Zealand dairy trade within the regional Trans-Pacific Partnership (TPP) FTA. The testimony outlined the strong anti-competitive practices within the New Zealand dairy industry and its global manipulation of dairy markets.
NMPF Insists on Total Exclusion of U.S.-New Zealand Dairy Trade in TPP
In a January 25, 2010 letter to the Office of the United States Trade Representative (USTR), NMPF again pressed for full exclusion of New Zealand’s dairy products in the Trans-Pacific Partnership (TPP) trade agreement. Although NMPF believed in the importance of balanced trade and in the potential for well-negotiated trade agreements to benefit the U.S. dairy industry as a whole, each agreement must be judged on its own merits.
A U.S.-New Zealand TPP would negatively impact the U.S. dairy industry. NMPF estimated that milk prices received by producers would drastically drop and gross revenues received by U.S. dairy farmers would plunge by a cumulative $20 billion over the first 10 years of the FTA if U.S. dairy restrictions on exports from New Zealand were fully phased out in the TPP FTA.
Members of the Congressional Dairy Farmer Caucus also sent a letter to USTR Ambassador Ron Kirk expressing their support for exclusion of U.S.-New Zealand dairy trade under the TPP.
Dairy Groups Urge USTR to Oppose U.S.-New Zealand TPP Trade Agreement
NMPF and the U.S. Dairy Export Council (USDEC) sent a letter on December 17, 2009 to U.S. Trade Representative Ron Kirk in response to USTR’s notification of Congress that the U.S. intended to proceed with negotiations to create a Trans-Pacific Partnership (TPP) trade agreement. The TPP talks would include New Zealand, Australia, Chile, Peru, Singapore, Brunei, and Vietnam. NMPF had long stated that a non-WTO trade agreement like this was no place for dealing with the complex and greatly imbalanced dairy trade relationship between the U.S. and New Zealand.
In the letter, NMPF and USDEC reaffirmed opposition to the inclusion of any U.S.-New Zealand dairy trade in the TPP negotiations. NMPF also insisted on the importance of not reopening existing FTAs, including the agreement with Australia that maintains the vast majority of dairy tariffs on imports from Australia.
NMPF and USDEC also released a joint press release on the TPP trade agreement.