Casey to U.S. Trade Negotiators: Secure Trade Benefits for U.S. Dairy Farmers in New Agreement

Dairy Industry is Number One in PA Agriculture Sector, Contributes $7.6 Billion Annually to PA Economy

Washington DC- Today, U.S. Senator Bob Casey (D-PA) announced that he has written a letter to the United States Department of Agriculture (USDA) and Acting U.S. Trade Representative (USTR) Demetrios Marantis urging them to use upcoming trade negotiations to level the playing field for dairy farmers in Pennsylvania and across the U.S. The Administration is engaged in ongoing trade negotiations as part of the Trans-Pacific Partnership (TPP) during which one of the key issues will be the treatment of dairy exports to countries like Canada and New Zealand. Casey’s letter was joined by a bipartisan group of 30 Senators.

“Dairy farming plays a critical role in our state’s economy. It’s vital that the Administration use this upcoming negotiation to ensure Pennsylvania’s dairy farmers can export their products to places like Canada and New Zealand,” Casey said. “USDA and USTR must demand that foreign countries follow the rules. Pennsylvania’s dairy farmers are willing to compete but must do so on a level playing field.”

Strong concerns remain about the expansion of U.S.-New Zealand dairy trade and the impact it could have on this country’s dairy sector if major reforms are not undertaken by New Zealand.  New Zealand has consistently expressed interest in greater access for its dairy products to enter the U.S. market.  At the same time, it has resisted considering significant reforms to its dairy sector policies, which permit the concentration of virtually 90% of its milk supply in one company. 

In addition, fully opening the Canadian market to U.S. dairy products would secure meaningful new market opportunities for our U.S. dairy industry.  To be truly effective, dairy discussions with Canada should include a focus not only on removing tariffs but also on ensuring that various nontariff barriers are not used to hinder U.S. dairy exports.  In the past, U.S. exporters have secured tariff concessions from Canada only to see efforts to impede access developed through other means.

A copy of Sen. Casey’s letter appears below:

Dear Sec. Vilsack and Acting U.S. Trade Rep. Marantis:

We would like to express our appreciation for the dedication of USTR and USDA in helping grow U.S. exports, including areas of high importance to our states such as the dairy industry, particularly in rural areas.  The tens of thousands of dairy farm families in this country increasingly rely on global markets to help provide growing demand for the milk they produce.  In addition to the rural employment created directly by dairy farming, the U.S. is also home to a strong dairy manufacturing sector that helps provide good jobs throughout the states.

As USTR and USDA move forward this year with intensified efforts to bring Trans-Pacific Partnership (TPP) negotiations to a close, we wish to underscore the importance of pursuing a positive outcome for America’s dairy sector and the critical role that dairy-related discussions with Canada and New Zealand will play in achieving that goal.  In addition to future opportunities to grow through this negotiation, we are also concerned about the need to maintain current U.S. dairy exports to our TPP partners in the face of potential new barriers to trade.  Without open access to Canada and absent significant policy reform by New Zealand, dairy industry in our states strongly believes that the TPP promise of growth in export demand for U.S. dairy all but vanishes and that in its place they could see significant losses here at home.

Strong concerns remain in our states about the expansion of U.S.-New Zealand dairy trade and the impact it could have on this country’s dairy sector if major reforms are not undertaken by New Zealand.  New Zealand has consistently expressed interest in greater access for its dairy products to enter the U.S. market.  At the same time, it is our understanding that New Zealand has resisted considering significant reforms to its dairy sector policies, which permit the concentration of virtually 90% of its milk supply into the hands of one company.  Dairy producers and processors in our states are deeply concerned that this market concentration policy provides New Zealand, the world’s largest dairy exporter, with a tremendous advantage in global markets and are insistent on seeing it effectively addressed as a necessary precursor to any expansion of U.S.-New Zealand dairy trade in TPP.

We remain hopeful that the addition last year of Canada to the TPP will improve the prospects for achieving a result that will benefit this country’s dairy farmers and processors.  Fully opening the Canadian market to U.S. dairy products would secure meaningful new market opportunities for our U.S. dairy industry.  To be truly effective, dairy discussions with Canada should include a focus not only on removing tariffs but also on ensuring that various forms of nontariff barriers are not employed to hinder U.S. dairy exports.  In the past, U.S. exporters have secured tariff concessions from Canada only to see efforts develop that impeded access through other means.  We now face the prospect of yet another such obstacle to U.S. exports in the form of potential changes to Canada’s product standards that are not based on science. We appreciate USTR’s and USDA’s attention to this matter and urge your agencies to continue to actively impress upon Canada the importance of not impeding current U.S. exports of safe dairy products through new regulatory barriers.

Finally, one of the other major areas of importance is an issue impacting the wider U.S. agricultural sector as well – the sanitary and phytosanitary (SPS) chapter within TPP.  This agreement is a key avenue for ensuring that we have binding SPS commitments that improve upon current obligations in this area. Too often, safe U.S. food products are confronted with sudden and unscientific barriers in foreign markets.  Using TPP to address that pervasive problem, while upholding high, science-based U.S. standards for protecting the health and safety of all Americans, could improve the export prospects for a wide range of American agriculture.

Sincerely,

Robert P. Casey, Jr.

United States Senator

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