European Commission targets wide range of ag products, including milk proteins, cheese, fruit and juice.

November 10, 2020

2 Min Read
Dairy in crossfire of EU trade dispute
Yanni Koutsomitis, Flickr

In light of an announcement Monday of the European Commission’s intention to implement retaliatory tariffs on U.S. exports to the European Union, the International Dairy Food Assn. (IDFA) urged the current and future U.S. administrations to pursue a trading relationship with the EU that is based on “fair competition and a level playing field.”

IDFA noted that U.S. dairy producers and exporters have suffered for years under the weight of the EU’s market-distorting practices, while U.S. dairy importers also are affected by these heightened trade tensions.

“The U.S. dairy industry and its global partners need to reset the trading relationship with the EU,” IDFA president and chief executive officer Dr. Michael Dykes said in a notice to IDFA members.

In May 2018, the World Trade Organization found that EU subsidies for Airbus airplanes had adversely affected U.S. airplane manufacturers and that the U.S. was entitled to retaliate under WTO’s dispute settlement system. The U.S. has had $11 billion of retaliatory tariffs in place on a wide range of European products, including dairy, since October 2019. In October 2020, WTO granted the EU permission to impose tariffs on $4 billion of U.S. goods over subsidies for Boeing, which is the foundation for the latest announcement.

The new list of U.S. products targeted by the European Commission includes a wide range of agricultural and non-agricultural products, such as concentrated milk proteins, cheese, fruit, juice, spirits and more. The retaliation is effective Nov. 10, 2020.

While the value of the dairy products identified in the list is not significant, IDFA views any barrier to U.S. dairy exports as harmful, particularly given the dairy trade imbalance that exists with the EU. For years, U.S. dairy producers and exporters have sought to correct this trade imbalance by removing current barriers, including high tariffs, small quotas and geographical indications. The latest announcement is yet another signal that the U.S.-EU trade relationship is headed in the wrong direction by adding barriers rather than removing them, the group noted. The value of U.S. dairy exports to the EU was just over $145 million in 2018 and fell to $116 million in 2019.

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