Dairy producers were one of the last agriculture sectors to throw their support behind the Trans-Pacific Partnership (TPP). With House Speaker Paul Ryan (R., Wis.) hailing from the second-largest dairy-producing state, he may have to weigh the support of his constituents on whether or not to allow for a vote on TPP in the next few weeks during the lame-duck session of Congress.
The National Milk Producers Federation and U.S. Dairy Export Council have lauded groundbreaking new commitments on sanitary and phytosanitary issues and significant improvements in how geographical indications (GIs) are handled within TPP. The GI improvements have become especially important as the European Union continues to wield GIs as nontariff trade barriers and limit market access for U.S. dairy exporters.
After a Nov. 1 discussion on TPP and related issues at George Washington University, Ambassador Darci Vetter, the U.S. Trade Representative’s chief agriculture negotiator, said dairy has become “one of the more enthusiastic groups out there supporting TPP.”
TPP opens the U.S. market to a major competitor in New Zealand, but, if implemented correctly, it also would allow increased market access to Canada, Japan and other TPP markets for more U.S. dairy exports.
"If TPP works like the magnet we think it will, every country in the Asia-Pacific that joins after, that's just gravy (for the U.S.) because none of them really have active dairy sectors, and dairy demand is growing exponentially," Vetter told Pro Trade's Doug Palmer. "So, getting that first agreement was really hard, but the potential they see after is really big."
Meanwhile, those opposed to TPP are also using dairy in an effort to persuade Congress to reject TPP.
In a survey of more than 1,000 dairy producers conducted by the Wisconsin Farmers Union (WFU), nearly 80% of respondents agreed that TPP should be rejected until milk import concerns are resolved in the agreement.
“This survey underscores what we have been consistently hearing from producers all across the country: TPP is a bad deal for America’s family farmers and ranchers," Roger Johnson, president of the National Farmers Union, said. "Particularly for dairy producers, who are pinched by persistently low milk prices due to overproduction, TPP stands to further undermine an already volatile dairy market.”
For a majority of the surveyed producers, opening up U.S. borders to low-cost imports of milk protein concentrates (MPCs) is the most common concern with the current TPP trade agreement. Popular comments among respondents included: “Fair trade-not free trade!”
“In the case of TPP, we will be opening our borders to a flood of low-cost MPCs from New Zealand, which will displace Wisconsin milk in cheese production. This loss will supposedly be offset by giving U.S. dairy producers access to the Japanese market, but that access could evaporate overnight if Japan manipulates its currency to make U.S. imports more expensive,” WFU president Darin Von Ruden said. “TPP should be put on hold until it includes binding provisions against currency manipulation.
The survey also asked respondents to rate their level of concern about entering into a trade agreement with countries that are known currency manipulators and the loss of U.S. sovereignty due to the expansion of investor-state dispute resolutions. More than half of the respondents said they were “very concerned” about currency manipulation, while 70% answered that they were “very” or “somewhat concerned” about the loss of U.S. sovereignty.