Friday, January 22, 2016

Trans-Pacific Partnership Trade Agreement May Not Be Big Win for New York Agriculture

From Empire Farm & Dairy magazine:


WASHINGTON — Dairy farmers hoping to see a rush of business between the United States and Canada — a market largely closed to American milk products — may want to hold their applause for the Trans-Pacific Partnership.

That is the message from lawmakers and organizations representing dairy farmers and plant owners, who say the 12-nation deal reached in 2015, still subject to approval in Congress, does not clearly spell a big win for New York agriculture.

Lawmakers are likely to vote on it this year.

The outcome could shape the future for key parts of the dairy business in New York, which ranks near the top in U.S. production of manufactured dairy products such as cheese and yogurt that can be easily exported; beverage milk is reserved mostly for domestic use, although U.S. producers have angled unsuccessfully for more fluid sales into Canada too.

The big issue is whether Canada will relax its milk supply management system enough to allow substantial amounts of U.S. dairy products into the country.

“Even with the TPP agreement, Canada continues to strongly endorse their supply control program and protect their borders from serious dairy imports and exports,” said Bruce Krupke, executive vice president of the Northeast Dairy Foods Association, representing milk processors. 

“I don’t see their domestic dairy policy changing in the near future, much to their detriment. I also don’t see any increased dairy trade near-term opportunities with them either,” Krupke said.

Krupke said he does not rule out the possibility of longer-term trade prospects with the agreement’s signers, including Japan and Vietnam. New York Farm Bureau, representing farmers of every type in the state, generally supports the deal because it could lower trade barriers to growing markets, said spokesman Steve Ammerman.

Skeptical lawmakers, including Sen. Kirsten Gillibrand (D-N.Y.) and Reps. Tom Reed (R-Corning) and Elise Stefanik (R-Willsboro) said they haven’t decided whether to support the deal, largely because of concerns about U.S. dairy trade with Canada.

“The TPP negotiations have caused me a great deal of heartburn,” Reed said in an interview. “I still believe they have a lot farther to go.”

Sen. Debbie Stabenow (D-Mich.), ranking Democrat on the Senate Agriculture Committee, “pushed our trade negotiators until the very end to secure the best deal possible for American dairy farmers in TPP,” a Democratic committee aide said.

The Obama administration strongly supports the deal, which its representatives helped negotiate. President Obama urged Congress in his State of the Union Address to approve it this year.

Passage isn’t assured. In addition, some presidential candidates, including Sen. Ted Cruz (R-Tex.) and Hillary Rodham Clinton, the front-running Democrat, say they oppose it.

The biggest lobbying group for dairy farmers, the National Milk Producers Federation, which represents farmer-owned bargaining cooperatives, hasn’t come down one way or the other.

“It’s quite a complicated agreement,” said Shawna Morris, vice president of trade policy at the NMPF, headquartered in Arlington, Va. The deal contains hundreds of dairy provisions and will take some time to review, she said.

The good news, from the U.S. dairy industry’s perspective, is that the TPP does not appear to open the U.S. to a flood of dairy products from other countries such as New Zealand, where milk is produced cheaply for export.

“When the TPP effort began, it was little more than a façade for a free trade agreement with New Zealand,” the NMPF said in a newsletter to members. “Eventually, in response to consistent recommendations from NMPF and others, countries with more significant dairy markets – Canada and Japan – were added to this agreement. Those decisions created new opportunities for our industry in TPP that previously had not been possible.”

Dairy groups agree that trade is becoming more important to the U.S. industry, and New York as the third-ranking state for cheese production and a top producer of yogurt is especially affected. 

Nearly a fifth of U.S.-produced dairy solids were exported in 2014, Krupke said. As much as some farmers or manufacturers may not like the idea of depending on trade with foreign countries, he said, “We have to get used to the concept and embrace it.”

Reed, who serves on the House Ways and Means Committee — which oversees trade policy — said in an interview that he worries about how the actions of U.S. trading partners affect the state’s milk and wine businesses, for example.

Already, New York wine makers can’t use the term “Champagne” for the sparkling white wine they sell to some countries, and terms such as “gouda” or “parmesan” for cheese made in New York may be endangered in some European markets.

This year could bring more developments on that issue, known as geographic indicators, farm groups said.

That dispute plays out in yet another trade deal taking shape, the Transatlantic Trade and Investment Partnership.

If you like what you read from the magazine, you can subscribe to it by sending $50 for one year or $75 for two years to Empire Farm & Dairy, 260 Washington St., Watertown, NY  13601

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