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USDEC Board Votes to Support Trans-Pacific Partnership Agreement; Issues Caution on Transatlantic Trade and Investment Partnership

CONTACTS:

Mark O'Keefe, USDEC
PHONE: (703) 528-4812
FAX: 703-528-3705
mokeefe@usdec.org

CHICAGO - The U.S. Dairy Export Council (USDEC) Board of Directors voted today (April 7) to support the Trans-Pacific Partnership (TPP) trade agreement, finding that the overall features of the pact outweigh its shortcomings. At the same time, the board emphasized the critical need for the United States to follow through on TPP compliance and implementation issues.

The vote occurred at the end of the USDEC Board of Directors Meeting in Chicago. It followed a positive recommendation by the USDEC Trade Policy Committee, which based its decision on an extensive evaluation of all the provisions of the deal by staff at USDEC and National Milk Producers Federation, with which USDEC has worked closely throughout the negotiations. The organizations are now urging Congress to pass the agreement this year.

“The evaluation found that even though TPP fell well short of providing meaningful access to the highly-protected markets of Canada and Japan, the net effect of all market access concessions was neutral to slightly positive for U.S. dairy,” noted USDEC President Tom Suber. “But what ultimately tipped the scales in favor were the achievements obtained by U.S. negotiators to reduce non-tariff barriers to trade—sanitary and phytosanitary (SPS) measures and geographic indications (GIs)—and the potential for TPP to expand over time to include new participants.”

The board agreed that the non-tariff advances and expansion potential represent important and necessary improvements over the status quo in the region.

·         SPS measures. TPP achieves important SPS improvements in the areas of science and risk analysis, equivalence, import checks, transparency and the establishment of a consultative mechanism intended to provide a means to resolve SPS problems expeditiously.

·         GIs. TPP’s GI provisions break new ground by establishing a more equitable international model for GI registration, filling a void that the European Union (EU) has exploited to erect non-tariff trade barriers and limit competition from U.S. cheese suppliers. 

“The SPS and GI commitments in particular should help keep in check the ability of countries to erode existing and future market access for U.S. dairy exporters through arbitrary, unjustified and oftentimes sudden regulatory determinations,” said Suber. 

In terms of TPP expansion, Indonesia, the Philippines, Taiwan and Thailand have already expressed serious interest in joining TPP. All four are free trade agreement (FTA) partners with New Zealand and three are FTA partners with Australia, putting U.S. dairy suppliers at a competitive disadvantage. These four countries purchased $665 million in U.S. dairy products in 2015 but $1.7 billion from Australia and New Zealand. 

“Our chief competitors not only enjoy a competitive advantage through existing FTAs, they are aggressively seeking to improve their edge by negotiating additional bilateral agreements,” said Suber. “And because we’ve entered a period of intensified competition globally, any FTA advantage gets magnified.”

“After a thorough analysis, the board concluded that TPP warrants support,” concluded Paul Rovey, chairman of USDEC. “Despite lacking significant new market access inroads, on the whole the agreement provides growth opportunities for U.S. dairy suppliers and also strengthens the U.S. role in regional and global trade policy.”

Transatlantic Trade and Investment Partnership

While endorsing the TPP agreement, the USDEC board also stated that it should not be used as a template for future trade negotiations, passing a resolution officially voicing concern regarding the direction of the Transatlantic Trade and Investment Partnership (TTIP) talks between the United States and the EU. The administration’s push to finalize an agreement this year despite lack of any discernible progress on dairy SPS issues, GIs and tariffs, is worrisome, the board concluded. 

“The U.S. dairy sector runs an annual $1-billion trade deficit with the EU in large part because we provide more favorable tariff and non-tariff market access to EU suppliers,” said Suber. “There are no indications that TTIP talks are proceeding in a manner that would help level the playing field and provide that same access to U.S. suppliers.”

The board voted to oppose any advancement of TTIP that does not address U.S. tariff, SPS and GI issues and create more equitable conditions for U.S. suppliers.

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The National Milk Producers Federation, based in Arlington, Va., develops and carries out policies that advance the well-being of U.S. dairy producers and the cooperatives they collectively own. The members of NMPF's cooperatives produce the majority of the U.S, milk supply, making NMPF the voice of nearly 32,000 dairy producers on Capitol Hill and with government agencies. For more on NMPF's activities, visit www.nmpf.org.

The U.S. Dairy Export Council is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products. USDEC accomplishes this through programs in market development that build global demand for U.S. dairy products, resolve market access barriers and advance industry trade policy goals. USDEC is supported by staff across the United States and overseas in Mexico, South America, Asia, Middle East and Europe. The U.S. Dairy Export Council prohibits discrimination on the basis of age, disability, national origin, race, color, religion, creed, gender, sexual orientation, political beliefs, marital status, military status, and arrest or conviction record. www.usdec.org.