China, US dispute may halt milk exports

The US and China are locked in a trade dispute that threatens to temporarily shut US milk products out of that country's rapidly growing dairy market.

The Chinese government is citing a glitch in a US export certification as grounds for blocking dairy products. China threatened to stop accepting all US milk products last week, but backed off as both countries discussed terms.

Earlier, China agreed to a one-month extension in the trade agreement between the countries that allows dairy products to keep moving.

As part of the agreement, in place since 2007, China has required certain animal health declarations from the US. However, the USDA determined the mandate was unfounded and left animal health statements out of the final negotiated certificate.

The US dairy industry exports billions of dollars of dairy products all around the world with its foreign sales last year totalled US$2.3 billion.