Dairy Organizations Urge Intensified Negotiations to Restore Trade Flows

Tag: USMCA dairy

Dairy Organizations Urge Intensified Negotiations to Restore Trade Flows

Posted on by Theresa Sweeney

Leaders from the National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) released the following statements today in response to retaliatory measures announced by Mexico, Canada and China.

“The President believes tariffs are necessary to address the opioid crisis in the United States. We urge Mexico and Canada to take U.S. concerns seriously,” said Gregg Doud, President and CEO of NMPF. “Mexico and Canada are valuable trading partners that American agriculture depends on, and trade with those countries is critical to the well-being of dairy farmers. Let’s focus on getting the concerns ironed out quickly so we can focus on bolstering these critical trade relationships. Then, let’s put those tariff tools to work, driving change with the trading partner that’s brushed off U.S. concerns for far too long – the European Union.”

“Exports are fundamental to the health of the U.S. dairy industry. One day’s worth of milk production out of every six is destined for international consumers and U.S. dairy sales to Mexico, Canada and China account for 51% of our total global exports. That’s a lot at stake,” said Krysta Harden, President and CEO of USDEC. “Dairy farmers and manufacturers are counting on a swift resolution to this impasse and urge a redoubling of efforts at the negotiating table to find a workable way forward that addresses U.S. national security concerns while also preserving export flows that are vital to supporting American farmers and workers. We’re eager to focus on working with the Administration on expanding global opportunities for American dairy products in ways that build on the existing base of sales to our trading partners.”

What dairy trade may look like under Trump

Posted on by Alan Bjerga

Jaime Castaneda HeadshotU.S. trade policy has changed significantly since the United States last passed a new free trade agreement (FTA), all the way back in 2011. During the past decade, securing new agricultural market access has become more difficult as it has been frustrated at times by both a lack of support in Washington, D.C., as well as an unwillingness from our trading partners to engage in earnest negotiations.

Although the United States has at times proposed new regional pacts and secured more targeted trade expansions in specific sectors, these proposals were typically seen as unbalanced and ultimately were found to be lacking in terms of political support here at home. Unfortunately, this trend looks poised to continue to the detriment of U.S. dairy producers and exporters. Despite these headwinds, U.S. dairy (and agriculture) exports have grown exponentially over the last 15 years, due in key part to established FTAs, World Trade Organization access, and more targeted agreements, but also because the growth in consumer demand for our dairy products outside the U.S. has risen in parallel with greatly improved economic conditions since the recession of 2009.

With Donald Trump returning to the White House in January, the National Milk Producers Federation is examining how his second administration may approach trade policy and what it means for U.S. dairy producers.

Comprehensive trade agreements and tariffs

President Trump’s “America First” economic policy was the cornerstone of his trade policy decisions in his first term, and it is a trend expected to accelerate in a second term. The first Trump administration focused on renegotiating the North American Free Trade Agreement (NAFTA) — now the U.S.-Mexico-Canada Agreement (USMCA) — while also securing sectoral trade agreements with China and Japan and a pursuit of FTAs with the United Kingdom (UK) and Kenya. Negotiations with the UK faltered as a result of the enormous complexity of the UK’s exit from the European Union. Discussions with Kenya ended with the change from the Trump to Biden administrations. A resumption of trade negotiations with both could be explored under a second Trump administration in conjunction with Congress passing a renewal of Trade Promotion Authority (TPA) legislation.

New comprehensive trade agreements, or deals announced in specific sectors — along the lines of those pursued under Trump 1.0 — would open new markets for U.S. dairy producers. In contrast, tariff hikes imposed on trading partners invite the potential for retaliatory duties on U.S. dairy exports, exacerbating any competitive disadvantage that American dairy producers might face while reaching international customers.

USMCA review

President Trump’s renegotiation of NAFTA resulted in USMCA in 2020, with newly negotiated aspects of dairy products trade between the United States and Canada featured as a key element of the agreement. As USMCA prepares to enter its six-year mandatory review period in 2026, Canada’s persistent attempts to circumvent its dairy market access and protein export cap obligations will be front and center in the discussions, both on Capitol Hill and within the administration.

The role of Congress

While trade policy is largely driven by the executive branch, Congress will have a significant role in several areas over the next four years. In addition to any TPA discussion, there could also be a debate over China’s Permanent Normal Trade Relations (PNTR) status. Congress will also want to have input regarding the USMCA’s 2026 review process, and a renewal of the trade title of the farm bill will influence dairy’s participation in U.S. food aid programs. Across these issues, the U.S. dairy community will have to make its voice heard to ensure that policymakers prioritize the issues that impact dairy producers and workers on the ground.

These are just a sample of the many trade issues that NMPF, the U.S. Dairy Export Council (USDEC), and their allies will prioritize in the Trump administration. With the backing of more than 26,000 dairy farms and millions of additional workers, NMPF is confident that it will be able to work with Congress and the administration to pursue new market access, resolve harmful barriers to trade, and promote the U.S. dairy industry as the global supplier of choice.

This column originally appeared in Hoard’s Dairyman Intel on Nov. 7, 2024.

NMPF’s Bjerga on Trade, FMMO

Posted on by Alan Bjerga

NMPF Executive Vice President Alan Bjerga speaks with RFD-TV about how all of agriculture needs to fight for the integrity of trade agreements in the wake of a USMCA dispute panel decision that failed to protect U.S. access to Canada’s market. The President’s Export Council, with member co-op Land O’Lakes representing farmers, discussed the importance of market access in a White House meeting on Wednesday. Bjerga also talked about the resumption of the USDA Federal Milk Marketing Order hearing in Indiana this week, and how repeated delays aren’t helpful for milk producers.

USMCA Dispute Panel Limits Canadian Market Access

Posted on by Alan Bjerga

Today’s ruling by a U.S-Mexico-Canada Agreement (USMCA) dispute panel allowing Canada to restrict the dairy access that the United States negotiated for in the USMCA pact weakens the agreement’s value to the US dairy industry, according to the National Milk Producers Federation and the U.S. Dairy Export Council.

An earlier panel ruled in January 2022 that Canada had improperly restricted access to its market for U.S. dairy products. In response, Canada made insufficient changes to its dairy tariff rate quota (TRQ) system, resulting in an outcome that still fell far short of the market access the U.S. expected to receive under USMCA. To address that shortcoming, the U.S. brought a second case to challenge the changes that Canada instituted. Today the panel announced that Canada was not obligated to make further changes.

“It is profoundly disappointing that the dispute settlement panel has ruled in favor of obstruction of trade rather than trade facilitation,” said Jim Mulhern, president and CEO of NMPF. “Despite this independent panel’s adverse ruling, we’d like to thank the Biden Administration and the many members of Congress who supported us for their tireless pursuit of justice for America’s dairy sector. We urge Ambassador Tai and Secretary Vilsack to look at all available options to ensure that Canada stops playing games and respects what was negotiated.”

Since the U.S. Trade Representative initially launched the first dispute settlement case against Canada in 2021, USDEC and NMPF have worked with USTR, USDA, and Congress to try to secure full use and value of USMCA’s dairy TRQs for American dairy producers and processors.

“By allowing Canada to ignore its USMCA obligations, this ruling has unfortunately set a dangerous and damaging precedent,” said Krysta Harden, president and CEO of USDEC. “We do however want to express our appreciation for allies in Congress and the Administration for their efforts and commitment to fighting for U.S. dairy. This is unfortunately not the only shortcoming in Canada’s compliance with its international commitments. We are committed to working with USTR and USDA to evaluate efforts to address Canada’s continued harmful actions that depress dairy imports while simultaneously evading USMCA’s dairy export disciplines.”

When first implemented in 2020, USMCA established 14 different TRQs, which allow a predetermined quantity of imports at a specified low tariff rate. The TRQ system that Canada implemented awarded the vast majority of TRQ volumes to Canadian processors and granted very limited access to TRQs to distributors – resulting in limited market access for U.S. exporters. Minor modifications to that system made in 2022 have continued that imbalanced approach.

Trade Team Builds International Ties While Supporting U.S. Dairy

Posted on by Theresa Sweeney
  • Championed the introduction of the Safeguarding American Value-Added Exports (SAVE) Act to protect market access for U.S. cheesemakers
  • Secured the right of producers to use the common name “gruyere” in the U.S. market through a landmark legal victory in the U.S. Court of Appeals for the Fourth Circuit
  • Led engagement with the U.S. government to hold Canada accountable for its ongoing violations of USMCA’s dairy provisions
  • Promoted U.S. dairy’s trade initiatives and sustainability progress as lead sponsor of the Asia-Pacific Economic Cooperation’s agricultural ministerial luncheon in Seattle
  • Formed alliances with dairy and agricultural organizations worldwide to strengthen and grow NMPF’s voice.

NMPF trade activities this year have included initiatives that defend U.S. products in the global arena while expanding trade. Efforts made in collaboration with the U.S. Dairy Export Council (USDEC) and the Consortium for Common Food Names (CCFN) prompted the May 17 introduction of the bipartisan, bicameral Safeguarding American Value-Added Exports (SAVE) Act to increase U.S. government actions to protect common terms like “parmesan” and “feta” in export markets. The milestone bill to advance common name protections capped off months of congressional engagement, including a March 1 event on Capitol Hill.

The SAVE Act explicitly defines “common names” as a term ordinarily used for marketing a food product, as determined by the U.S. Department of Agriculture (USDA), and directs the U.S. government to proactively defend the rights of U.S. common name users and exporters. Led in the Senate by Sens. John Thune, R-SD, Tammy Baldwin, D-WI, Roger Marshall, R-KS, and Tina Smith, D-MN, and in the House by Reps. Dusty Johnson, R-SD, Jim Costa, D-CA, Michelle Fischbach, R-MN, and Jimmy Panetta, D-CA, the SAVE Act is expected to be incorporated into the 2023 Farm Bill. Members and supporters can make their voice heard by writing to their representatives in Congress through NMPF’s advocacy platform.

NMPF also secured a key victory for U.S. cheese producers and dairy farmers through a March 3 ruling from the U.S. Court of Appeals for the Fourth Circuit, which confirmed that “gruyere” is a common name, in opposition to French and Swiss consortiums which hoped to trademark the term in the U.S. market. The NMPF trade policy team, alongside USDEC and CCFN, worked diligently with the legal team to ensure that American gruyere producers can continue to market and sell their products in the United States.

NMPF’s dedication to building dairy exports through expanding market has included fly-ins to DC, use of congressional trade hearings to elevate dairy priorities, meetings with USTR and USDA political appointees on trade, intensive work with U.S. negotiators on using the Indo-Pacific Economic Framework to address nontariff trade barriers, and joint agricultural coalition efforts such as the trade-focused August 21 letter to 2024 Presidential candidates urging a greater commitment to trade agreements.

Efforts also extend to ensuring existing agreements deliver full benefits for U.S. dairy. NMPF commended the U.S. government’s Jan. 31 announcement that it requested a second USMCA panel to hold Canada responsible for violating the agreement’s dairy market access obligations. The announcement resulted from extensive work by NMPF with USTR and USDA last year to ensure that the second USMCA case was well-positioned for success. NMPF and USDEC since January have continued to work closely with USTR and USDA to support their case and ensure that Canada grants U.S. producers and exporters the market access negotiated and promised under USMCA.

To bolster NMPF’s work to preserve and expand market access for dairy products in markets around the world, the organization has also continued to grow its global voice and influence, forming partnerships with leading dairy and agricultural organizations overseas.

As governments around the world embrace protectionist stances and adopt ill-advised policies, NMPF strives to continue to grow its network of allies to support pro-dairy, pro-trade and science-based rules. Strengthening ties in Latin America, NMPF announced on April 20 a new collaboration with the National Agricultural Organizations from Argentina, Brazil, Paraguay, Uruguay, Chile, Bolivia and Colombia to represent the dairy and livestock industry in international climate discussions. During a trip to Japan, NMPF formalized a July 6 “Letter of Friendship” with JA-Zenchu, Japan’s Central Union of Agricultural Cooperatives, to address the common difficulties that dairy farmers in the two countries are facing. Most recently, NMPF and USDEC signed on July 27 an agreement with the Italian Dairy Association, Assolatte, to promote the nutritional benefits of dairy products and support dairy-friendly policies in international forums.

NMPF’s Morris Talks Trade, Canada on Podcast

Posted on by Alan Bjerga

NMPF and USDEC Senior Vice President for Trade Shawna Morris discusses the need to hold accountable for its trade commitments on the Agriculture of America podcast. Canada’s improper allocations under its Tariff-Rate Quota system is impeding the market access promised U.S. dairy farmers under the USMCA trade agreement, making a legal remedy necessary. The U.S. needs to strongly defend its farmers, Morris said; while farmers are hoping for a fair solution with Canadian compliance, retaliatory tariffs against Canadian products may be necessary, she said.

NMPF’s Morris on Holding Canada Accountable

Posted on by Alan Bjerga

 

NMPF and USDEC Senior Vice President for Trade Shawna Morris discusses the latest round of conflict between the United States and Canada over over U.S. dairy access to that market. Morris praised the U.S. government’s willingness to take on Canada again after already winning on dispute before a USMCA dispute resolution panel. Morris speaks in an interview on RFD-TV.

U.S. Government Plows Ahead on Canadian USMCA Compliance

Posted on by Theresa Sweeney

NMPF lauded the administration’s Jan. 31 announcement that the U.S. had requested a second U.S. Mexico Canada Agreement (USMCA) panel to evaluate Canada’s compliance with its USMCA dairy market access obligations. The decision pushes forward the dispute settlement process, slightly more than a month after the U.S. requested consultations with Canada on an expanded set of USMCA dairy tariff-rate quota (TRQ) commitment violations.

Since USMCA’s implementation, Canada has continually flouted the agreement’s TRQ provisions, giving preferential treatment to Canadian processors at the expense of American dairy exporters and Canadian consumers. When this breach was initially confirmed by the first USMCA dispute panel, Canada responded by making only insignificant changes to its TRQ policies. This latest move challenges the persistent problems remaining in Canada’s dairy TRQ system.

NMPF and USDEC have worked closely with the U.S. Trade Representative and USDA throughout the dispute to support their case and demonstrate Canada’s lack of compliance with its USMCA commitments.

U.S. Dairy Praises USTR Move to Hold Canada Responsible for USMCA Violations

Posted on by Theresa Sweeney

The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) commended today’s announcement that the U.S. Trade Representative has formally moved to advance a U.S.-Mexico-Canada Agreement (USMCA) dispute settlement proceeding and establish a second panel to determine whether Canada has been in violation of its market access obligations under the agreement.

Canada’s unwillingness to abide by the tariff-rate quota provisions of USMCA has been an issue since the agreement’s implementation began. The United States won its first dispute panel on the matter in Dec. 2021, which found that Canada was reserving most of its preferential dairy TRQs for Canadian processors that have little incentive to import product. Canada’s revised approach to USMCA TRQs, released in May, also provided inequitable advantages to Canadian processors.

“Canada’s TRQ allocation system is not only a violation of USMCA — it directly harms American dairy farmers, processors, and other workers by unfairly restricting access to their market,” said Jim Mulhern, president and CEO of NMPF. “USTR’s action is an important step in righting this wrong and sending a message that the U.S. will fight violations of trade deals in Canada and wherever else they may be committed.”

“The U.S. dairy community greatly appreciates the Biden Administration’s decision to prioritize steps to address Canada’s USMCA violations,” said Krysta Harden, president and CEO of USDEC. “Unfortunately, Canada has shown a pattern of not living up to the dairy commitments it has made in trade agreements. As long as they continue to drag their feet, we’ll continue to work with USTR and USDA to fight back, and propose retaliatory action if necessary.”

If the panel ultimately confirms that Canada has been violating its obligations under USMCA, the U.S. would be granted the right to impose retaliatory duties should Canada fail to fix its unfair TRQ administrative practices.

U.S. Holding Canada Accountable for USMCA Violations

Posted on by Theresa Sweeney

After a steady – and loud – drumbeat of NMPF and USDEC insistence that Canada must honor its dairy obligations in the U.S.-Mexico Canada Agreement (USMCA), the U.S. Trade Representative (USTR) announced Dec. 20 that it is filing a new request for dispute settlement consultations with Canada.

The move will expand the scope of a second USMCA dairy dispute to include additional elements necessary to ensure that Canada fully complies with its USMCA market-access obligations. Since the United States launched its initial USMCA dispute panel in May 2021, NMPF and USDEC have fully and vocally supported USTR and USDA in their dogged attempts to secure for American dairy producers the agreement’s full negotiated benefits.

For over a year, Canada has violated USMCA’s tariff-rate quotas (TRQs) provisions by reserving most of its preferential dairy TRQs for Canadian processors. Canada’s revised approach to TRQs, released in March 2022, still violated the agreement – prompting USTR to pursue a second USMCA enforcement action.

While NMPF is grateful for USTR’s meticulous work that has led to this new announcement, Canada has a long history of restricting trade and not honoring existing agreements. NMPF and USDEC will push for retaliatory measures that make Canadian officials reconsider their actions should that continue.

NMPF’s Bjerga on Dairy’s Recent Policy Wins

Posted on by Alan Bjerga

As the year comes to a close, the National Milk Producers Federation is applauding two recent measures that support the dairy industry. NMPF Senior Vice President of Communications Alan Bjerga spoke with RFD-TV’s own Janet Adkison about how the Growing Climate Solutions Act and Sustains Act benefit dairy farmers, and what USTR’s announcement of a new request for dispute settlement consultations with Canada means for U.S. dairy.

 

https://www.rfdtv.com/two-recent-measures-from-congress-and-ustr-are-giving-a-boost-to-dairy-farmers

U.S. Dairy Salutes USTR’s Pursuit of Canadian USMCA Compliance

Posted on by Alan Bjerga

ARLINGTON, VA – The National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) commend the U.S. Trade Representative’s announcement today that it is filing a new request for dispute settlement consultations with Canada in order to expand the scope of the second U.S.-Mexico-Canada Agreement (USMCA) dairy dispute to include additional elements necessary to ensure that Canada fully complies with its USMCA obligations.

The initial USMCA dispute panel, launched by the United States in May 2021, found Canada in violation of USMCA’s tariff-rate quota (TRQ) provisions by reserving most of its preferential dairy TRQs for Canadian processors. In March 2022, Canada released its revised approach to USMCA TRQs, which still violated the USMCA, by providing inequitable advantages to Canadian dairy processors and failing to administer TRQs in a manner to ensure full use of TRQs as intended by USMCA. This prompted USTR to request formal consultations with Canada over the measures, the first step in bringing a second case before a USMCA dispute settlement panel.

Today’s actions are the culmination of months of painstaking work to evaluate the strongest basis for the United States’ case and find the best approach to bring Canada into compliance given its persistent violations.

“We thank USTR and USDA for their diligence in working to ensure that American dairy producers have the market access promised under USMCA. NMPF is committed to doing everything it can to support the case,” stated Jim Mulhern, president and CEO of NMPF. “At the end of the day, if Canada continues to flagrantly flout its obligations, the U.S. government has to be ready with retaliatory measures that make the Canadian government reconsider its actions.”

“It is deeply unfortunate that Canada simply refuses to honor the full terms of our agreement,” said Krysta Harden, president and CEO of USDEC. “USMCA is a fair deal that was thoroughly negotiated and agreed to by the Canadian government. The U.S. dairy community is thankful the administration and Congress have taken Canada’s violations seriously and are fighting for full export benefits that the American dairy industry earned.”

 

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