NMPF, USDEC Release Comment Following Release of Economic Analysis of TPP
June 3, 2016
Following the U.S. International Trade Commission report on the economic impact of the Trans-Pacific Partnership, NMPF and the U.S. Dairy Export Council reiterated that the 12-nation trade agreement, if appropriately enforced, would be beneficial to the U.S. dairy industry.
The U.S. International Trade Commission (USITC) released its report in mid-May. The assessment analyzed specific economic characteristics of the TPP, including its impact on gross domestic output, imports and exports, and employment opportunities.
In assessing the TPP’s effect on dairy, the report concluded that the agreement would have an overall positive impact on U.S. dairy exports and a limited impact on U.S. dairy imports. In fact, new exports under TPP would exceed today’s imports by roughly $1.5 billion.
“If properly implemented and enforced, on balance the agreement will represent a step forward for the U.S. dairy industry,” NMP and USDEC said. “But the benefits of the TPP can only be realized if the United States ensures that the signatories live up to their commitments under the agreement, as well as to their prior trade obligations.”
The report also indicated that Japan and Canada would reduce selected tariffs over long phase-in periods, but both markets would remain highly managed even after TPP’s full implementation. In the U.S. import market, dairy producers in Australia, Canada, and New Zealand would be granted additional access under TPP with new dairy tariff-rate-quotas (TRQs). The report also indicated that Japan and Canada would reduce selected tariffs over long phase-in periods, but both markets would remain highly managed even after TPP’s full implementation. In the U.S. import market, dairy producers in Australia, Canada, and New Zealand would be granted additional market access with new dairy TRQs. However, with the exception of two products — butter and butter oil, and whole milk powder — the volume of foreign dairy products doesn’t reach the current maximum U.S. import quota, due to the higher cost of exporting to the United States, and relatively high prices in Asia. TPP members are not expected to significantly increase exports to the United States above current volumes. As a result, TPP members are not expected to significantly increase exports to the United States from current volumes.
“The TPP can support the continued growth of our industry if the United States ensures that the agreement advances U.S. dairy prospects compared to the status quo at the time of its conclusion, and that its provisions are fully implemented and aggressively enforced,” the dairy groups said.
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