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.
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.
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
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.”
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 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.”
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.
More than a year of work from NMPF and the U.S. Dairy Export Council (USDEC) reaped dividends for dairy Jan. 4, as a landmark decision found that Canada is improperly restricting access to its market for U.S. dairy products and violating its U.S.-Mexico-Canada Agreement (USMCA) tariff-rate quota (TRQs) commitments.
The case, the first of any kind brought before a USMCA Dispute Settlement Panel, was launched with broad bipartisan support last May after months of urging from NMPF and USDEC, which is urging Canada to comply swiftly with the panel’s ruling.
“The United States and Canada negotiated specific market access terms covering a wide variety of dairy products, but instead of playing by those mutually agreed upon rules, Canada ignored its commitments. As a result, U.S. dairy farmers and exporters have been unable to make full use of USMCA’s benefits,” said Jim Mulhern, president and CEO of NMPF, calling the decision” an important victory for U.S. dairy farmers and the millions of Americans whose jobs are tied to the U.S. dairy industry.”
TRQs are a system of tariffs negotiated between countries that allow a predetermined quantity of imports at a specified tariff rate, where that rate is often at or near zero. Any additional imports above that predetermined quantity are subject to significantly higher tariffs. In the case of U.S. dairy products, these additional Canadian tariffs typically price U.S. dairy products out of Canada’s market, making fair access to Canadian dairy TRQs vital to maximizing exports to that market.
When the Office of the U.S. Trade Representative (USTR) brought the case in May, it argued that Canada has maintained dairy TRQ measures that run counter to its market access obligations under USMCA. USMCA specifically requires that Canada open its TRQ application process to anyone active in the Canadian food and agriculture sector. Yet USTR noted that Canada designates the bulk of its quotas to Canadian dairy processors who have little incentive to import, does not provide fair or equitable procedures for administering the quotas, and does not give retailers any access to them. These measures deny the ability of U.S. dairy farmers, workers, and exporters to use the TRQs and fully benefit from USMCA.
While the United States tried to resolve the matter through consultations with Canada before initiating the Dispute Settlement Panel, Canada refused to change its policies. NMPF and USDEC engaged USTR and Congress, achieving broad bipartisan support from more than 125 members of the House and Senate for bringing this matter to the USMCA Dispute Settlement Panel. There, a panel of legal experts evaluated Canada’s current dairy trade policies against its commitments under USMCA and found Canada was not meeting its USMCA obligations.
NMPF’s Senior Vice President for Trade, Shawna Morris, discusses Canada’s latest efforts to evade the USMCA trade deal on the “Adams on Agriculture” podcast.
NMPF’s Senior Vice President for Communications, Alan Bjerga, discusses NMPF’s “CEO’s Corner” for June, which deals with U.S. dairy’s growing leadership in sustainable dairy exports. The monthly thought-leadership series highlights key dairy issues of the day from an NMPF perspective and is part of the organization’s “Sharing Our Story” initiative that spotlights farmer voices and industry commentary. Bjerga spoke on WEKZ radio, Janesville, Wisconsin.
U.S. dairy exports are at record levels, showing the potential of overseas markets. But trade integrity is necessary to expand dairy sales, making enforcement of the USMCA trade agreement a must, NMPF Senior Vice President of Communications Alan Bjerga said on RFD-TV.
The US International Trade Commission (ITC) unanimously voted Feb. 11 to reject import restrictions on blueberries from Mexico, Canada, Argentina, Chile and Peru, ending the threat of retaliatory tariffs against U.S. dairy exports.
In testimony before USTR in August, NMPF Senior Vice President Jaime Castaneda urged the commission to avoid putting U.S. dairy producers again in the crosshairs of a trade dispute with Mexico. Per U.S. census data, over $1.4 billion of U.S. dairy products were sold to Mexico in 2020 – a market that would be at risk if tariffs on blueberry imports from Mexico are imposed.
NMPF in December joined 34 other agriculture and food groups to write the US Trade Representative (USTR) opposing limitations on blueberry imports. This broader coalition effort also secured a bipartisan, bicameral Congressional letter from Senator Kyrsten Sinema (D-AZ) and Senator Jerry Moran (R-KS) arguing against action that would invite subsequent retaliation against U.S. agricultural exports.
