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.
After sustained engagement from NMPF and USDEC to bring the U.S. Trade Representative’s attention to Canada’s administration of its Tariff Rate Quota (TRQ) obligations under USMCA, USTR announced Dec. 9 it will initiate official consultations with Canada.
“Enforcement has been one of the top priorities of our industry since the final agreement was announced, and we’ve worked diligently to ensure that it remains one of USTR’s top priorities, as well,” said Jim Mulhern, president and CEO of NMPF, in a statement the day of the announcement. “Only when Canada is held fully accountable to its trade commitments will America’s dairy farmers be able to realize the full benefit of the provisions that the U.S. government worked so hard to secure.”
The USTR decision came after months of groundwork by NMPF and USDEC. Even prior to USMCA’s entrance into force, the two organizations called attention to the fact that Canada’s TRQ allocations undermined the intent of USCMA’s dairy provisions. The concerns of the organizations were shared with Congress, then echoed by a broad bipartisan coalition of members of Congress in two letters from the House and the Senate.
NMPF will continue to work with both trade officials and Congress to monitor Canada’s compliance with USMCA, as further enforcement may be necessary to effectively address Canada’s unfair dairy policies.
NMPF Vice President for Trade Shawna Morris discusses recent U.S. Trade Representative action to bring Canadian dairy-trade policy into compliance with the USMCA trade deal on the “Adams on Agriculture” podcast.
The U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) applaud today’s announcement that the U.S. Trade Representative (USTR) will initiate official consultations with Canada to examine the administration of its dairy Tariff Rate Quota (TRQ) obligations. The two organizations, with strong bipartisan backing from Congress, have long raised the alarm about the need to ensure the United States-Mexico-Canada Agreement (USMCA) is fully enforced, due to Canada’s history of undermining its trade commitments.
“USMCA is designed to improve trade with Canada, while modifying some of Canada’s trade-distorting dairy policies. We knew from day one that enforcement would be key to bringing the intended benefits home to America’s dairy industry. I applaud USTR for hearing our concerns and relying on our guidance to take this critical enforcement step to ensure that the agreement is executed in both letter and spirit,” said Tom Vilsack, president and CEO of USDEC. “This is the critical first step, but more work may be needed to ensure Canada complies with its Class 7 related USMCA commitments as well.”
Even prior to its entry into force, USDEC and NMPF monitored Canada’s actions regarding its USMCA commitments and urged Congress and the administration to make this a priority as soon as USMCA entered into force. Canada has distorted its TRQ administration to limit imports from the U.S. Earlier this year, USDEC and NMPF highlighted for USTR and the U.S. Department of Agriculture (USDA) the inconsistencies between Canada’s dairy TRQ allocations and Canada’s USMCA obligations. In a detailed filing submitted to the administration, NMPF and USDEC provided the agencies with a specific legal review of the Canadian TRQ system and an explanation of the negative impacts resulting from them.
“America’s dairy farmers appreciate USTR’s commitment to the fair and transparent enforcement of USMCA. Enforcement has been one of the top priorities of our industry since the final agreement was announced, and we’ve worked diligently to ensure that it remains one of USTR’s top priorities, as well. Only when Canada is held fully accountable to its trade commitments will America’s dairy farmers be able to realize the full benefit of the provisions that the U.S. government worked so hard to secure,” said Jim Mulhern, president and CEO of NMPF. “We look forward to working closely with the incoming administration as well since enforcement efforts are likely to require sustained focus going forward.”
The concerns raised by USDEC and NMPF have been echoed by a broad bipartisan coalition of members of Congress. In August, 104 Representatives sent a letter to USTR and USDA asking for Canada to be held accountable to its trade promises while a letter in the Senate was signed by 25 Senators. USDEC and NMPF commend the continued engagement of so many members of Congress on this important issue.
A coalition of leading farm and agricultural groups are applauding a bipartisan letter sent today by 111 members of Congress urging stronger protections for American-made food and wine exports using common terms. This is an important message regarding the need for enhanced U.S. efforts to combat the European Union’s (EU) attempts to ban U.S. exports of cheese, meat and wine products that are labeled with common terms – such as parmesan, bologna or chateau.
“Congress has spoken loudly; it is time for stronger action by the U.S. government. For far too long, Europe has used unjustified trade barriers to block competition from high-quality American-made cheese, meat and wine exports. Europe is undermining global trade rules and weakening intellectual property system protections internationally. Today’s letter is an important reminder that we must raise the bar in our efforts in order to prevail in creating agricultural trade policy that works for the world, not just the European Union,” said Jaime Castaneda, Executive Director of Consortium for Common Food Names.
The letter asks the U.S. Trade Representative (USTR) and U.S. Department of Agriculture (USDA) to make safeguarding common food and wine terms a core policy objective in all current and future trade negotiations. The effort was led by Reps. Jim Costa (D-CA), Jodey Arrington (R-TX), Angie Craig (D-MN), Dusty Johnson (R-SD), Ron Kind (D-WI), Mike Gallagher (R-WI), Jimmy Panetta (D-CA) and Mike Kelly (R-PA).
“The EU’s ban on common cheese terms has already impeded U.S. dairy exports but even more severe consequences for our industry lie ahead if the EU is allowed to continue these unfair trade practices. Preserving export opportunities for American-made cheeses and other products labeled with common terms must take priority in all future trade negotiations. I applaud Congress and the leaders of this effort for setting this important precedent in defense of American-made exports,” said Tom Vilsack, president and CEO of U.S. Dairy Export Council.
“Creating false barriers to block exports denies families around the world the high-quality food America’s farmers and ranchers produce. It’s trade manipulation. We applaud the U.S. government for its efforts to remove unfair trade practices that keep our nation from competing in the global marketplace,” said American Farm Bureau Federation President Zippy Duvall.
“The European Union has for too long unjustifiably and erroneously attempted to restrict trade in common food name products, including meat exports from the U.S. The policy advocated in the bipartisan letter sent today to USDA and USTR will advance critical safeguards for common food name products in international trade and will enable America’s meat and poultry packers and processors, agricultural producers and food manufacturers to compete on a level playing field with their counterparts in the EU. We thank members of Congress for their leadership, and we stand ready to work with the Administration to defend against anti-competitive and protectionist policies pursued by trading partners that serve only to impede U.S. meat and poultry exports,” said Julie Anna Potts, CEO of the North American Meat Institute.
“NASDA Members work tirelessly with the federal government to open new doors for agricultural producers around the world. We encourage the U.S. Trade Representative (USTR) and U.S. Department of Agriculture (USDA) to amplify the importance of common food and wine terms as a core policy objective to successful free trade negotiations in the future. Doing so will ensure consumers are able to access the full bounties of our farmers and ranchers around the world,” said National Association of State Departments of Agriculture CEO Dr. Barb Glenn.
“America’s dairy farmers have been unduly harmed by the EU’s efforts to limit market opportunities for U.S. dairy products. For years, the EU has sought to ban high-quality American-made cheeses, putting U.S. dairy jobs at risk and limiting economic growth in the rural communities that rely on a healthy dairy industry. I appreciate the important work being done by Congress to ensure that U.S. trade negotiators must have all necessary tools at their disposal to fight back against the EU’s destructive agenda,” said Jim Mulhern, president and CEO of National Milk Producers Federation.
“We have watched time and again as the EU has gone well beyond protecting legitimate GIs to erect trade barriers that benefit their own producers at our expense. The recent EU-China agreement on GIs is a perfect example of how the EU abuses GIs for their own gain. The U.S. must do more to ensure a level playing field for common food names, grape varietal names and traditional terms and we are grateful to these Representatives for supporting this effort,” said Bobby Koch, President and CEO of Wine Institute.
In July, 61 Senators sent a similar letter requesting that the U.S. government enhance protections for common food and wine terms.
NMPF’s Trade team offers an issues update for the 2020 NMPF Virtual Town Hall.
The U.S. Department of Agriculture (USDA) and Food and Drug Administration (FDA) today signed a Memorandum of Understanding (MOU) that will establish an interagency process to further support exports of U.S. dairy products. Both agencies play critical roles in facilitating foreign sales of American-made dairy products, which is recognized and appreciated by the U.S. dairy industry. This MOU will draw upon the expertise of FDA as well as USDA’s Agricultural Marketing Service (AMS) and Foreign Agricultural Service (FAS) to deepen and streamline their work together on the issues facing dairy exports to the benefit of U.S. dairy farmers and manufacturers.
The U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) worked with both agencies to advance this new approach to dairy export collaboration. NMPF and USDEC deeply appreciate the USDA and FDA’s dedication to drafting this new MOU to facilitate U.S. dairy exports and their ongoing collaboration with the dairy industry. Foreign competitors are making advances in international markets, making efforts to expand overseas opportunities for U.S. dairy critical to the long-term health of U.S. dairy farmers and processors.
“Today’s announcement of an interagency MOU on dairy trade between USDA and FDA is the result of years of conversation and efforts between stakeholders within the U.S. dairy industry and the U.S. government to establish consistent guidance on tackling the rising number of export challenges facing our industry. This MOU will help our industry continue to grow in an increasingly competitive global environment,” said Tom Vilsack, president and CEO of USDEC.
“This new partnership ensures that the staff at USDA and FDA are working together in the most efficient way possible to lower barriers for our farmer’s dairy exports. Increasing U.S. dairy exports will strengthen the health of our farmers and rural communities, which is more important than ever as America’s dairy industry faces new and unprecedented challenges. We appreciate all of the hard work from both agencies and stand ready to support the USDA and FDA’s commitment to open new doors for U.S. dairy exports,” said Jim Mulhern, president and CEO of NMPF.
