• Purebred Publishing

US Dairy Export Council - Inside the Next 5

A quick 5-minute read exploring 5 recent developments on the dairy trade policy and public affairs front with an inside look at the staff efforts that made them possible.

1. Jobs. Jobs. Jobs.

Labor Day is all about jobs, and USDEC continues working to support the expansion of jobs in agriculture and dairy. Just before the official end of summer, we released a new study by Informa Agribusiness Consulting that found retaliatory tariffs are jeopardizing 8,200 dairy jobs. That’s not all. Duties levied by China and Mexico will lower dairy exports by $2.7 billion, depress farmers’ revenues by $16.6 billion, and decrease the industry’s economic output more than $8 billion by 2023 unless they are addressed. Informa’s estimates only include current tariffs, meaning the economic impact could be far worse if China implements other taxes, as it has promised. USDEC President and CEO Tom Vilsack summed up the report to the media, noting: "The damage is real, and it is being felt by dairy farmers, dairy businesses and dairy exporters every day. Exports hold tremendous potential for our industry and the struggling rural economy, but we must address these tariffs immediately for that potential to be realized."

2. Improving Relations with China

Considering Informa found that 73% of losses would occur in China, it’s little wonder that Vilsack and other USDEC colleagues made a quick trip there to visit with Chinese government and industry officials in late August. In Beijing, the dairy delegation met with Chinese trade agencies to discuss the flow of dairy exports amid growing trade tensions between the nations. They also outlined ways to ease regulatory burdens that have slowed some sales. In the city of Xi’an, Vilsack addressed the China Dairy Industry Association, where he explained that free and open trade helps producers in both countries. Jaime Castaneda, USDEC’s senior vice president, attended the trip and added that it’s in everyone’s interest to work together and continue expanding the Chinese dairy market, which holds tremendous promise. In addition to the CDIA meeting, Castaneda also sat down with U.S. embassy and Chinese officials to deliver that message. The future of the Chinese market is of considerable importance to USDEC members; in addition to its large role as a major dairy ingredient buyer already, USDEC is predicting China will become the world’s biggest cheese importer in the next 10 years.

3. Progress in Mexico

Last week brought some welcomed news that will hopefully move us a step closer to keeping Informa’s predictions at bay when it comes to Mexico. The United States and Mexico agreed in principle to a new trade deal to solidify the future of our trade arrangement with Mexico. This positive break-through was made possible following a year and a half of hard work by the USDEC staff, which has been involved since the beginning of NAFTA 2.0, working hand-in-hand with many USDEC members on this major industry priority. Work along the way has included countless meetings with government officials from both countries; the development of economic analyses to show the impact of Mexico trade on dairy; thousands of miles traveled back and forth from Mexico to coordinate with colleagues and partners; USDEC membership outreach to policymakers; and collaboration with other industries affected by the outcome.

Although last week’s announcement notched a major step forward, details of the trade deal must be finalized and analyzed, the pact must be ratified, and dairy trade priorities with the other NAFTA participant – Canada – must be successfully resolved. As you read this, USDEC staff continue to work with U.S. negotiators with those goals at the forefront.

4. More Trade Wins for U.S. Dairy

The good trade news hasn’t been limited to Mexico. U.S. dairy exporters face EU efforts to build GI roadblocks around the globe, and USDEC works doggedly to fend them off. On that front, USDEC staff recorded victories in two important battles this summer. Last year, USDEC filed opposition to trademarks requested by a foreign company that risked cornering the market on cheddar and mozzarella in Vietnam. USDEC argued both were generic terms and needed to remain free for all to use in that market. The country’s trademark office agreed with USDEC and decided in late July to avoid naming restrictions on cheese imports. Similarly, an Italian group tried to trademark the term asiago in Canada – a filing that was withdrawn after USDEC staff intervened through the Consortium for Common Food Names.

5. A Busy Fall

As you can see, it’s been a hectic summer at USDEC, but fall promises to be just as jammed packed. That’s why we’re preparing now for upcoming events and activities that USDEC is spearheading. Among them: An Asia-Pacific Economic Cooperation (APEC) conference in Australia to promote trade by designing common-sense templates for import certificates; meetings with U.S. members of the International Dairy Federation to map out priorities on the international regulatory stage; coordination with the Pan-American dairy industry under the FEPALE agreement to combat trade-inhibiting regulations in the region; and an upcoming meeting between the U.S. Dairy Alliance and the Mexican industry in Chicago. Stay tuned to USDEC for more about each of these important initiatives.

Notable Quotable

“News about the genuine momentum in NAFTA 2.0 talks has not come without a lot of hard work, and I’d like to thank our members for their constant support of USDEC’s staff, which has coordinated regularly throughout the past year and a half of this process with U.S. trade officials and our colleagues in Mexico regarding the importance of the issues at stake for dairy in NAFTA negotiations. Your support remains instrumental as we now enter what we all hope will be NAFTA 2.0’s final successful stage.”

-Tom Vilsack, USDEC President and CEO

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