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Trans-Pacific Partnership Trade Pact Closes; Impact on US Dairy Not Yet Clear

October 7, 2015

After an intense week of final negotiations in Atlanta, representatives from the 12 countries involved in the Pacific Rim trade deal reached a final agreement early Monday morning, ending more than five years of work on the massive agreement known officially as the Trans-Pacific Partnership.

Details of the final agreement are slowly emerging, and NMPF is examining them to assess the package’s overall impact on the U.S. dairy industry. The dairy negotiations were among the most difficult and contentious aspects of TPP talks, and dairy was one of the very last pieces of the negotiations wrapped up. Over the years-long duration of this major regional trading agreement, NMPF at each turn has worked aggressively to best position U.S. dairy interests.

As they did during the previous meeting of TPP Ministers in late July, NMPF staff and leadership actively participated in discussions with the negotiating team in Atlanta throughout the week in order to advocate strongly for America’s dairy farmers.

When the TPP effort began, it was little more than a façade for a free trade agreement with New Zealand, in light of the other 3 countries involved. Given the uniquely consolidated structure of New Zealand’s dairy industry, NMPF articulated strong concerns about the prospect of creating a one-way trade agreement with that country.

Eventually, in response to consistent recommendations from NMPF and others, countries with more significant dairy markets — Canada and Japan — were added to this agreement. Those decisions created new opportunities for our industry in TPP that previously had not been possible.   

We are still evaluating the extent of those new opportunities in the final package, as well as the degree of new domestic dairy competition that the U.S. government has agreed to with Australia and New Zealand. Given that dairy was concluded only Monday morning and involves a considerable degree of complexity across various countries and tariff lines, NMPF is withholding its judgment on the final agreement until we are able to review the specifics. 

“Based on information available to date, it appears that our industry has successfully avoided the type of disproportionate one-way street that we were deeply concerned could have resulted under this agreement,” said Jim Mulhern, President and CEO of NMPF. “New Zealand did not get the unfettered access to the U.S. market that it long sought; but Japan and Canada did not open their markets to the degree we sought. On an A through F grading scale for TPP, it was long clear the agreement would not score an A; the preliminary information suggests that the result is not an F. Our assessment of which of the remaining grades the final agreement merits will hinge on a careful analysis of its freshly agreed-upon dairy details.”

The strong and unified insistence from dairy farmers and processors across this country — aligned with dozens of members of Congress — reminded TPP parties throughout the course of negotiations of the risk of agreeing to a harmful dairy outcome. Fresh examples of that support in the final week included strong messages from House Ways & Means Committee Chairman Rep. Paul Ryan (R-WI) and committee member Rep. Ron Kind (D-WI), Senate Finance Committee Chairman Sen. Orrin Hatch (R-UT) and committee ranking member Sen. Ron Wyden (D-OR), a TPP House dairy letter led by Rep. Reid Ribble (R-WI), a TPP letter on dairy and sugar issues led by Senate Agriculture Committee Ranking Member Sen. Debbie Stabenow (D-MI), and a TPP letter on agricultural issues (including dairy) led by House Agriculture Committee Chairman Mike Conaway (R-TX).

Mulhern and NMPF Chairman Randy Mooney expressed deep appreciation for the strong interest and support from Capitol Hill in the outcome of the agreement’s dairy negotiations.

Read NMPF’s news release on the close of TPP negotiations.