Senators: Asia-Pacific deal milks U.S. dairy
Thirty senators are warning that U.S. dairy farmers and processors will be harmed by increased imports of dairy commodities from New Zealand that could result from upcoming talks to open up trade among several Asian nations.
The United States and the Trans-Pacific Partnership are scheduled to conduct their first round of negotiations on a regional Asia-Pacific trade agreement later this month. TPP members are Singapore, Chile, New Zealand, Brunei, Australia, Peru and Vietnam.
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| Kirk |
In a letter to U.S. Trade Representative Ron Kirk, the senators on Thursday said the U.S. dairy industry could suffer losses of up to $20 billion over 10 years if the United States lifts restrictions on New Zealand dairy imports. Dairy exporters will not commensurately benefit from a free trade pact because most other TPP nations already have bilateral trade agreements with the United States or have very low tariffs that do not pose a barrier to market entry, they said.
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| Feingold |
Sens. Russ Feingold, D-Wis., Arlen Specter, D-Pa., and Mike Crapo, R-Ind., are leading the effort against what they describe as one-sided dairy provisions.
The United States is a major market for milk protein concentrates and casein, which face few duties and no volume quotas compared with nonfat dry milk, butterfat or most cheeses from New Zealand. The latter group of products account for a small portion of New Zealand's total exports around the world while more than half of New Zealand's global milk protein concentrates and casein exports go to the United States because they are not subject to tariffs and duties, the senators said.
'Despite New Zealand's small size, its dairy industry is a global power. New Zealand's dairy industry is dominated by one company that operates as a virtual monopoly in controlling more than 90 percent of the country' milk production and approximately 40 percent of trade in key internationally traded dairy commodities. In light of this market power, the administration should consider whether genuine competition is possible as it proceeds with the TPP,' the letter said.
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| Specter |
'Because of the anticompetitive practices in New Zealand's dairy industry and the extensive degree of control it wields over world dairy markets to the detriment of the U.S. dairy industry, we are deeply concerned that an expansion of U.S.-New Zealand dairy trade would further open the U.S. to these imports while providing little additional market for American farmers in New Zealand and the other Pacific countries,' the senators told Kirk.
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| Crapo |
'This prospect is particularly troubling given the record low dairy prices American farmers have faced since late 2008 and the need for our dairy industry to rebuild export markets to help remedy the harm caused by these low prices. As you proceed with negotiations, we ask that you carefully consider and discuss with us how best to address within the TPP this unique threat posing such great potential harm to the future viability of America's dairy industry.'
Feingold also issued a statement, saying, 'Past trade agreements have opened opportunities for foreign farmers, including those in New Zealand, but it hasn't been a two-way street. With American dairy farmers facing record low dairy prices, it is exactly the wrong time for another trade agreement that short-changes them. The Obama administration must ensure that any agreement supports the long-term viability of America's dairy farmers.'
' Eric Kulisch 
