Showing posts with label Trans-Pacific Partnership trade agreement. Show all posts
Showing posts with label Trans-Pacific Partnership trade agreement. Show all posts

Friday, January 22, 2016

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

From Empire Farm & Dairy magazine:

By MARC HELLER

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

Wednesday, October 7, 2015

New York Could Benefit Greatly form the Trans-Pacific Partnership Trade Agreement

The U.S. Department of Agriculture on Wednesday put out a fact sheet stating how New York will benefit from the Trans-Pacific Trade agreement.

The fact sheet states New York state has five basic agricultural exports: dairy, fruit and nuts, vegetables, soybeans and feeds and fodder. New York ag exports have a value of about $1.7 billion.

Dairy --Japan will eliminate tariff s on cheese and whey and create tariff -rate quotas (TRQs) for whey, butter, milk powder and evaporated and condensed milk. Malaysia and Vietnam will eliminate tari ffs on dairy products. Canada will eliminate tari ffs on whey and create TRQs for cheese, fluid milk, butter and other products.

Fruits -- Japan, Malaysia, and Vietnam will eliminate tariff s on all fresh and processed fruits, including citrus.

Vegetables -- Malaysia and Vietnam will immediately eliminate all tariff s,and Japan nearly all tari ffs, on fresh and processed vegetables. All three countries will eliminate tariff s on potatoes and
potato products

The fact sheet states "The Trans-Pacific Partnership (TPP) will boost demand for U.S. farm and food products among nearly 500 million consumers in 11 countries across the Asia-Pacific region. By reducing tariff s and opening new markets for American agricultural products, the TPP will help increase farm income, generate rural economic activity and support local jobs."
 
A total of 12,900 jobs in New York state are supported by agricultural exports to other countries.
 
Also on Wednesday, Andrew Novakovic, a professor in the Dyson School of Applied Economics and Management at Cornell University, said the Trans-Pacific Partnership agreement could result in the opening of Canada as a dairy market for the United States and New York -- a market that has been closed for years.
 
He issued the following statement on how the Trans-Pacific Partnership will help the New York dairy industry:
 
“The outlines of the dairy agreement contained in Trans-Pacific Partnership is distinguished not so much by what it did, but rather that it managed to do anything at all. The participants in the trade agreement include the two most protectionist dairy sectors in the world and, arguably, the two most liberal.

The U.S. occupies an intermediary position that was very protectionist 20 years ago, and has become more liberal and more self-assured in world trade.

The breakthrough for the dairy chapter was a Canadian agreement, under heavy U.S. lobbying, to expose their closed system to slightly greater imports, which they cleverly will do within their production quota system.

Under the Canadian system, not only has the trade door been closed, they have tightly managed milk production to essentially assure stable and profitable prices for dairy farmers.

The accumulated effect has been a Canadian dairy industry that in many respects resembles U.S. farming of 40 years ago and prices that are increasingly higher.

From 1991 through 2000, Canadian farm milk prices averaged 18 percent higher than the U.S. Since 2000, they have averaged 62 percent higher. Profitability in Canada is more stable than the U.S., but not dramatically higher.

The implication is that the supply-managed system has, over time, allowed increased costs to be rewarded with increased prices. Eliminating the protection of the Canadian cocoon is a frightful prospect for Canadian farmers and an alluring opportunity for world exporters, including New Zealand and the U.S.

Although Canada apparently has agreed to only permit an amount of dairy product imports equal to 3.25 percent of its total milk supply, this represents a brand new opportunity for the U.S. to develop marketing relationships with Canadian processing and marketing companies and the confidence of Canadian consumers.

This opportunity will be available to any dairy firm in the U.S., but it will be especially enticing to border states, like New York. As a beginning, it is assuredly modest, but what is terribly important is that it is a beginning.”