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.
Tag: USMCA
USMCA Dispute Panel Limits Canadian Market Access
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.
NMPF, USDEC Outline Trade Barriers for USTR to Address
NMPF and USDEC urged the U.S. Trade Representative to take action to resolve pressing trade barriers including tariff discrepancies and disputes with Canada and other countries in Oct. 23 comments submitted for the agency’s annual National Trade Estimate Report.
The report is designed to catalogue key barriers impacting U.S. exports and prioritize USTR efforts to address them. NMPF emphasized the importance of exports to the health of the U.S. dairy industry and reiterated its concern that the administration has chosen to put less energy into pursuing free trade agreements that open new markets for U.S. dairy products.
NMPF listed the specific major trade barriers confronting the U.S. dairy industry on a country-by-country basis in key markets, including:
- Tariff discrepancies faced by U.S. dairy exporters vs. competitors that have trade agreements with key markets.
- Indonesia’s protracted process for registering U.S. dairy plants. NMPF urged USTR and USDA to establish a streamlined and more predictable facility registration process.
- Canada’s Tariff-Rate Quote allocation system, which represents an ongoing U.S.-Mexico-Canada Agreement (USMCA) violation. NMPF has worked closely with USTR on the second dispute settlement panel and remains focused on ensuring that Canada’s TRQ administration procedures are fully USMCA compliant.
- Egypt’s refusal to allow widely used halal certifying bodies to provide the required halal certification for all dairy imports. This opaque procedure is not WTO-compliant and should be replaced with Halal certification procedures that permit multiple certification bodies used by U.S. exporters, just as other markets already permit.
NMPF Supports USDEC in Shoring Up Ties in Mexico
NMPF’s Jaime Castaneda traveled to Mexico on Sept. 25-27 with leadership from the U.S. Dairy Export Council (USDEC) and Dairy Management, Inc. (DMI) to reaffirm the U.S. dairy industry’s commitment to working with Mexico as a key dairy trading partner.
Krysta Harden, president and CEO of USDEC; Barb O’Brien, president and CEO of DMI; Alex Peterson, Missouri dairy producer and chair of USDEC; and Marilyn Hershey, Pennsylvania dairy producer and chair of DMI; and Castaneda took part in a series of meetings with government officials and local dairy industry leaders.
The delegation spoke to Mexico’s importance as a trade partner for the U.S. dairy industry and the organizations’ commitment to building on the foundation that the U.S.-Mexico-Canada Agreement has established. The U.S. delegation emphasized the commonality between Mexico and the U.S. dairy industries and the need to defend dairy’s image and provide nutrition to consumers in both countries.
Castaneda raised strong objections to any geographical indications restrictions that the European Union may seek to convince Mexico to impose if they would limit the ability of U.S. exporters to use common cheese names. He also urged the Mexican government to reject proposed regulatory standards that would create unnecessary barriers to trade.
In talks with allied organizations, NMPF, USDEC and DMI offered to collaborate on efforts to increase milk consumption in Mexico through educational and marketing campaigns.
NMPF’s Morris Talks Trade, Canada on Podcast
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
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.
Trade Policy Victories for U.S. Dairy
By Shawna Morris, Senior Vice President for Trade, NMPF and U.S. Dairy Export Council.
The National Milk Producers Federation (NMPF) and the U.S. Dairy Export Council (USDEC) are proud to be the voice of defending the American dairy industry and promoting dairy exports in Washington D.C. and around the world. Looking back at this past year of trade policy, American dairy producers and the entire industry have much to be proud of.
U.S. dairy exports are on track for another record year in both value and volume — despite a lack of new market access, protectionist actions in key markets, and ongoing supply chain challenges.
Working with the government to help U.S. dairy thrive
The record export numbers are happening despite high costs and unreliable shipping networks that are still causing headaches for the industry more than two years after the global COVID-19 outbreak first snarled supply chains.
NMPF and USDEC have led the way in working with the U.S. government to address the concerns. In June, President Biden signed the Ocean Shipping Reform Act into law. Championed by NMPF and USDEC, the legislation limits ocean carriers’ ability to deny exports and charge unreasonable fees, clearing a significant hurdle for dairy exporters.
Elsewhere, the EU’s abuse of geographical indication rules continues to threaten U.S. producers’ access to foreign markets for common-name cheeses like “Parmesan” and “Feta.” In collaboration with the Consortium for Common Food Names (CCFN), NMPF and USDEC have pushed the U.S. government to proactively defend the rights of U.S. cheesemakers and fought the court battles necessary to advance this effort.
That work resulted in a key win last January, when a U.S. District Court ruled in our favor that “Gruyere” cheese can be produced anywhere – not just in France or Switzerland. This landmark victory again proved that common names are widely understood to refer to types of food, regardless of where they are produced.
Holding Canada responsible
The U.S.-Mexico-Canada Agreement (USMCA) provided a much-needed update to trade rules. NMPF and USDEC supported it as a deal that would increase exports and boost farm gate milk prices.
Unfortunately, Canada hasn’t held up its end of the bargain. By reserving most of its dairy tariff rate quotas (TRQs) for Canadian processors and directly impairing American exporters’ ability to access the Canadian market, it’s clearly a break of the USMCA’s TRQ provisions that allow market access.
NMPF and USDEC successfully advocated for last year’s initiation of the first-ever USMCA dispute settlement process. The United States won the initial case in January, but upon Canadian refusal to comply with the ruling, NMPF and USDEC prompted the U.S. government to pursue a second dispute panel, resulting in the U.S. seeking formal consultations with Canada in May. The organizations have urged a strong response on behalf of wronged U.S. dairy industry members to ensure that America’s dairy sector receives the full export benefits promised under the agreement.
Strengthening relationships in Latin America
NMPF and USDEC finalized partnerships with the Chilean National Federation of Producers (Fedeleche) and Rural Society of Argentina this year that will advance shared policy priorities internationally. Far more than just agreements on paper, these relationships set a foundation to confront emerging threats, both in key export markets and in international standard-setting bodies to ward off anti-trade and anti-dairy policies.
These examples are just a slice of the trade policy issues that touched the U.S. dairy industry in 2022, but each highlights the great potential of the American dairy industry to grow worldwide and shows the need for the U.S. government to work with us to get there. Looking to 2023 and beyond, NMPF and USDEC are looking forward to ensuring that exports keep growing in volume and in value, supporting the bottom line of dairy farmers, manufacturers, and workers throughout the country.
This column originally appeared in Hoard’s Dairyman Intel on Dec. 26, 2022.
NMPF’s Bjerga on Dairy’s Recent Policy Wins
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
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.”
NMPF’s Castaneda on Dairy Trade With Canada
Jaime Castaneda, NMPF’s Executive Vice President for Policy Development & Strategy, discusses Canada’s lack of willingness to honor its dairy commitments under USMCA on RFD-TV. A dispute resolution panel under the trade agreement has found Canada’s system of allocating access to its dairy market to the U.S. in violation of the deal. NMPF is urging an aggressive U.S. response.
NMPF’s Morris on Infant Formula Shortage
NMPF Senior Vice President for Trade Shawna Morris discusses the current nationwide infant formula shortage and ways to solve the immediate crisis, speaking with the National Association of Farm Broadcasters. While temporary import increases can help alleviate short-term shortages, current problems involve supply-chain shortfalls doesn’t reflect a lack of inputs, she said: “The milk, the ingredients, that the plant would need in order to produce formula, no challenge there. Instead, what we have is a problem more on the processing capacity piece.”
NMPF’s Morris on U.S. Dairy’s Trade Win Over Canada
Shawna Morris, Senior Vice President for Trade with the National Milk Producers Federation and the U.S. Dairy Export Council, discusses U.S. dairy’s win over Canada in the first trade dispute ever brought before the USMCA’s dispute settlement panel on RFD-TV. The panel ruled against Canada in a case brought by the United States over its unfair allocation of quotas that limited U.S. dairy access to Canada agreed to as part of USMCA.
