NMPF Suggests Ways to Improve Dairy Exports in Key Markets

As the new Trump trade policy team settles into the U.S. Trade Representative’s (USTR) office, NMPF has recommended ways the U.S. government can build on the positive trade balances that America’s dairy sector already enjoys in many key foreign markets. 

USTR, along with the Department of Commerce, asked NMPF and other stakeholders for input on the U.S. balance of trade with 13 partners: Canada, China, European Union (EU), Japan, India, Indonesia, Korea, Malaysia, Mexico, Switzerland, Taiwan, Thailand and Vietnam.

NMPF noted that of the 13 partners listed, the U.S. dairy sector has a trade surplus with 11, excluding only the EU and Switzerland.  In total, the United States exports almost twice as many dairy products to the 13 partners as it imports. The U.S. dairy sector’s top seven dairy export markets included six on the list: Mexico, Canada, China, Korea, Japan, Indonesia and Vietnam (Canada’s inclusion on the list of top dairy export markets is misleading, given that a sizable portion of dairy ingredients imported into Canada for further processing are not consumed there, but are re-exported, often to the United States).

In its recommendation of how trade relations with these nations should be handled, NMPF stated that “any effort to achieve balanced trade by focusing on trade deficits must take into account that for some sectors, including ours, trade surpluses are already in place, and are generating benefits to American farmers, workers and companies. We would strongly support efforts aimed at removing tariff and nontariff barriers to trade that constrain even greater access for U.S. dairy exports. Trade policies aimed at such outcomes would drive further returns to our farm sector and rural communities across the country in particular.”

In its country-specific submissions, NMPF focused on several priorities. These priorities are in line with the trade-promoting approach NMPF has advocated that the Trump Administration pursue, including:  

·        Preserving NAFTA and focusing modernization negotiations on safeguarding those economic sectors that have already been opened to free trade while creating more open trade in other areas, such as in Canada;

·        Encouraging trade negotiations with various Asian trading partners, particularly Japan;

·        Tackling barriers to U.S. exports that hold back the potential for even greater sales, such as:

  • Canada’s habitual use of nontariff measures to distort dairy trade;
  • Misuse by the EU and Switzerland of geographical indications to seek to monopolize sales of common food products; and
  • India’s long-standing refusal to engage in productive negotiations to reopen its dairy market despite benefiting substantially from unilateral access to the U.S. market under the U.S. Generalized System of Preference program.

This comment period provided the opportunity for NMPF to elaborate on many of the market-opening points conveyed to the Trump Administration since the beginning of 2017.  NMPF will continue to share recommendations with the Administration to further expand dairy exports.