U.S. dairy industry disputes Canada's increase in EU cheese quota

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Sept. 10, 2014 - U.S. dairy exporters and trade groups want the Obama Administration to pressure Canada to back out of the part of a new trade agreement that grants preferred access to cheese from the European Union and restricts U.S. sales to an already-tightly-restricted Canadian cheese market.

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Their letter to U.S. Trade Representative Michael Froman and Agriculture Secretary Tom Vilsack said that the pending Canada-EU trade agreement would give the EU exclusive access to more than 70 percent of Canada's Most Favored Nation cheese imports. The 16 dairy companies and groups said that the increased quota for the EU contravenes the 1994 General Agreement on Tariffs and Trade (GATT), which bars countries from using such agreements to restrict trade.

They asked Froman and Vilsack to insist that Canadian officials “abide by their obligations under GATT and refrain from implementing this provision” in the pending pact. Canada has said that it intends to allocate 800 tons of its current cheese quota to the EU, according to the letter. Such a step would reduce access to the Canadian cheese market for non-EU countries from 6,386 tons to 5,586 tons. “This reduction of 12.5 percent is significant given the tightly limited access the U.S. currently has to the Canadian cheese market, and will have a detrimental impact on the ability of U.S. cheese producers to export their product to Canada for consumption,” the groups said.

“This move is also of concern to dairy exporters in other countries, including New Zealand, Norway and Switzerland,” the U.S. industry letter adds. “We understand that dairy exporters in those countries will express similar concerns to their respective governments, and there may an opportunity for coordinated representations to the government of Canada.”

“The Canada-EU free trade agreement was already problematic because it bars U.S. companies from using several common cheese names on products headed across our northern border,” said Tom Suber, president of the U.S. Dairy Export Council (USDEC). “And now it is clear that the same FTA would reserve 800 tons of an already low quota for cheese imports for the EU.”

Clay Hough, senior group vice president of the International Dairy Foods Association, said the concessions Canada granted the EU “are disconcerting for IDFA and U.S. cheese exporters, and we will continue to support improved, not diminished, market access for U.S. dairy exports. . . . [A]s negotiations continue in the Transatlantic Trade and Investment Partnership (T-TIP) between the United States and the EU, protecting common cheese names will be a top priority for IDFA.”

In addition to USDEC and IDFA, the letter was signed by Atalanta Corp., Elizabeth, N.J.; Darigold, Seattle; Dairy Farmers of America (DFA); Emmi Roth USA, Monroe, Wis.; Fonterra USA; Kraft Foods Group; Land O' Lakes; Gellert Global Group, Elizabeth, N.J.; MCT Dairies, Millburn, N.J.; Norseland, Darien, Conn.; Tipico Products, Lakewood, N.J.; Trugman Nash Inc., Millburn, N.J., and the Wisconsin Cheese Makers Association (WCMA).

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