Congress, US Dairy Industry Scramble to Open Canadian, Japanese Markets in TPP
The Canadian government still hasn't "seriously engaged" demands for improved dairy market access in the Trans-Pacific Partnership, a bipartisan group of dozens of lawmakers said in a March 31 letter to U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack (here). Seventy-six lawmakers, led by Congressional Dairy Farm Caucus chairs Reid Ribble, R-Wis., and Peter Welch, D-Vt., said they are “very troubled” by Canada's intransigence.
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Obama administration officials have repeatedly urged Canada to revamp or remove its dairy supply management in a final TPP pact (see 1504030025). House Ways and Means Chairman Paul Ryan, R-Wis., also called for Canada’s ouster from the talks if it fails to make sufficient concessions (see 1502060011). The Office of the U.S. Trade Representative didn't respond for comment.
The Canadian dairy management system integrates “planned production, administered pricing and dairy product import controls,” the country’s Agriculture Ministry says (here). Some Canadian critics say the system hampers production and keeps consumer costs high (here), while the Canadian dairy industry remains a fierce defender (here). Canada tacks on a more than 200 percent tariff on some dairy imports, including even higher tariffs for cheese (here).
Several U.S. industry representatives applauded the letter, while echoing the same concerns over Canadian market access. “The U.S. cannot give a pass to major countries like Canada and Japan while at the same time increasing access for major competitors into our own market. That is completely unacceptable,” said National Milk Producers Federation President Jim Mulhern in a joint statement with two other U.S. dairy groups (here). “Given that TPP is likely to introduce more competition in a number of key markets, the bottom line is that this agreement must result in a net boost in export opportunities for U.S. dairy producers.” The letter also urged a “balanced dairy outcome.”
The National Farmers Union, however, criticized secrecy in TPP negotiations and said the primary goal of any free trade agreement should be tackling the U.S. trade deficit. Both NAFTA and the U.S.-South Korea FTA have both fallen short of expectations for deficit reduction, said NFU President Roger Johnson in a recent statement (here). Some lawmakers have voiced similar concerns (see 1504030005). Johnson called on Congress to reject Trade Promotion Authority, the legislation that trade supporters widely view as critical to passing TPP.
Negotiators should also make sure U.S. dairy negotiations with Japan “yield significant and comprehensive market access that will expand over time,” the lawmakers said in the letter. Trade observers say the two countries are still trying to hammer out details on rice, beef and pork, wheat, dairy and sugar (see 14060404). Big U.S. dairy associations argued nearly a year ago Canada will likely follow the Japanese lead on TPP concessions (here).