Editorial: Trade talks involve big stakes for Dairy

With all the innovation in our world, agriculture remains the chief obstacle to negotiating free trade agreements. While American trade representatives and elected officials have been speaking strongly in support of our dairy and other ag sectors, we hope these leaders carry it through from negotiation to inking a deal.

Among the trade pacts gaining momentum, the Trans-Pacific Partnership (TPP) appears to have more synergy than the Transatlantic Trade and Investment Partnership (T-TIP) with Europe. The Pacific trade pact involves the widest range of dairy markets. New Zealand and the U.S. rank as the world's first and third dairy exporters, while Canada and Japan have some of the most protectionist domestic polices for dairy, poultry and other ag commodities. The trade viewpoint that wins out will decide the dairy fates of many.

From a U.S. perspective, our dairy sector just passed the $7 billion-export threshold which was 15.4 percent of our milk production on a solids basis. The TPP represents a real chance to expand trade with the 12-partner countries that account for 40 percent of the world's gross domestic product (GDP) and 41 percent of the ag-based trade.

At the moment, House Ways and Means Committee Chairman Paul Ryan (R-WI) said Canada and Japan must open their markets to U.S. dairy farmers or not be part of the final trade agreement. This is a significant statement since the Ways and Means Committee has jurisdiction over international trade in the House. While the dairy sector appreciates this crucial support, we must keep in mind other higher ranking interests. For example, could U.S. dairy be cast aside in trade negotiations by the automobile lobby? With 2.1 million vehicles at a modest $20,000 a car, that $42 billion industry would engulf dairy and could potentially leave us on the trade negotiation curb.

Some trade specialists believe that the TPP could gain approval within the next 15 months. Until then, we must constantly remind our national leaders of the inroads dairy has made on the export front and what we could do in the future. The world's growing middle class wants to consume high-quality dairy proteins. The question is whether or not America's dairy farmers will be able to compete on a level trade playing field or will we continue to be handcuffed by artificial tariffs, quotas and other barriers?

This editorial appears on page 204 of the March 25, 2015 issue of Hoard's Dairyman.

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