December 5, 2018

Signing of USMCA deal "a hollow victory," says president of US dairy organisation
 

The US-Mexico-Canada Agreement (USMCA), which would replace the NAFTA framework for the three countries, was signed at the recent G20 meeting in Argentina - but the top official of  International Dairy Foods Association (US) considered the development "a hollow victory."

While Michael Dyke, president of IDFA, said the agreement represents "the next step," he argued that the US dairy sector's access to Mexico can only be assured if "the Section 232 tariffs on steel and aluminum imports are lifted."

"Mexico's retaliatory tariffs of 25% on American cheeses continue to have a negative impact on dairy exports, and US dairy's access to the Mexican market remains at serious risk. We're increasingly concerned that the benefits won't be realised as long as the tariffs on steel and aluminum imports remain in place," he elaborated.
 

"Once those tariffs are lifted, we will welcome the progress on USMCA, because it achieved three important priorities for the US dairy industry."

Dyke noted that the US managed to maintain its duty-free market access to Mexico, the country's "number one market for US dairy exports accounting for 25% of" its overall dairy exports.

"We are also pleased to see some progress on protecting our market access for certain cheese names with additional geographic indications provisions," he added.

Dyke also acknowledged the removal of Canada's controversial Class 7 pricing programme, as well as getting more access to the Canadian market.

"A signed USMCA is a positive step forward for the US dairy industry across the board. Free trade agreements like the USMCA that open markets and lower trade barriers are crucial to continuing the trend of growing US dairy exports. Maintaining and expanding access to international markets is essential for the future success of the US dairy industry," he said.
 

However, Dyke is concerned about how far the USMCA will go due to recent developments arising from last month's US midterm elections and "uncertainty" over steel and aluminum tariffs still in force. 

"...it is very difficult to predict the timing of the final approval of the USMCA by the United States and implementation of the agreement by both Mexico and Canada. We will advocate for expeditious congressional approval so the agreed-to changes can be implemented as soon as possible," he advised.

- International Dairy Foods Association