Trade Issues

A variety of foreign government actions can stop or hinder U.S. dairy trade. USDEC trade policy staff work aggressively to ensure such actions do not interrupt export flows. Issues they are unable to preempt, they work to resolve through close collaboration with USDEC market access staff and U.S. and foreign governments and regulators—an ongoing process that could take months or even years. 

Russian Market Closure

The U.S. Dairy Export Council continues to seek an end to Russia’s embargo of U.S. dairy products.

In September 2010, Russia closed its market to U.S. dairy products over a disagreement on export certificates and plant registration. Despite U.S. sustained attempts over the past several years to find a dairy certificate acceptable to both nations, Russia has kept the door firmly shut. The issue garnered extensive coverage in February 2014 when Russia refused to accept a shipment of Greek yogurt from a New York company intended for U.S. athletes at the winter Olympics.

USDEC has emphasized to U.S. authorities that Russia is clearly violating its WTO commitments. We continue to work with U.S. government officials to seek a resolution to the embargo that will allow trade to resume.

Abuse of Geographical Indications

The European Union (EU) has been using free-trade agreements to limit the use of broadly common cheese names to manufacturers in all but select EU geographic regions. The bloc has been steadily pushing for new restrictive language in trade deals with China, Japan and multiple countries in Latin America and the Middle East, all of which could have considerable negative impact on burgeoning U.S. cheese exports.

The U.S. Dairy Export Council has consistently maintained that geographic indications (GIs) are a necessary tool to protect distinctive foods from distinct regions, but that the EUs efforts go far beyond such protections. The EU is overreaching in its attempts to claim ownership for generic names of cheeses that have been manufactured all over the world for decades.

USDEC spearheaded the formation of the multi-national Consortium for Common Food Names in 2012 to meet the EU threat and worked to inform U.S. trade negotiators and legislators of the potential losses that would ensue should the EU successfully push the issue in Transatlantic Trade and Investment Partnership trade talks. Although the EU continues to press its GI agenda, USDEC efforts have brought much-needed spotlight on the problem and built a groundswell of opposition in Congress to the EU’s efforts. The GI fight will continue as the EU forges ahead with bilateral trade deals, including TTIP.

Visit the Consortium for Common Food Names website at www.commonfoodnames.com.

Canadian Market Access

High tariffs and a growing list of non-tariff trade barriers significantly hinder U.S. dairy access to Canada. Not only was U.S.-Canada dairy trade largely omitted from the North American Free Trade Agreement (NAFTA), the Canadian government has repeatedly taken steps to erode the very limited dairy concessions Canada did grant through NAFTA and through previous WTO agreements.

Most recently, Canada unilaterally altered the definition of “food preparations” to exclude any packages containing fresh cheese. The move intentionally blocked all U.S. exports of topping kits—blends of cheese and pepperoni in high demand from Canadian pizza makers.

And as part of its 2013 Comprehensive Economic and Trade Agreement (CETA) with the EU, Canada agreed to restrict the use of five common cheese names (asiago, feta, fontina, gorgonzola and muenster) after Europe claimed them as protected geographic indications (GIs). The move not only fosters broader EU GI efforts but constrains U.S. opportunities in the event other barriers are removed.

USDEC continues to work with U.S. government officials to relate the U.S. dairy industry’s Canada concerns and emphasize the importance of Canadian market access. USDEC efforts helped ensure that the USTR’s Office included the topping-kit issue in its 2014 National Trade Estimate report of the most important foreign barriers affecting U.S. exports of goods and services.

Canada’s GI concessions played a role in multiple letters from Congress emphasizing the need to tenaciously resist EU GI encroachment. And we have backed multiple congressional letters emphasizing that Canada must not only commit to removing dairy tariffs during the ongoing Trans-Pacific Partnership FTA talks but also agree to refrain from implementing future regulatory changes aimed at blocking U.S. dairy imports.

These systemic efforts by Canada to erode market access opportunities for U.S. dairy exports pose a significant concern and make that market more volatile than it should be. USDEC works to address these concerns and advocate for more consistent Canadian trade policy in compliance with its international obligations.