WASHINGTON, Aug. 20, 2013 – With negotiators meeting again this week on a Trans-Pacific Partnership trade agreement, a bipartisan group of 74 Members of Congress is urging the Obama Administration to conclude an agreement that reduces obstacles to U.S. dairy product exports.

Their letter preceded this week’s visit by U.S. Trade Representative Michael Froman to Japan and Brunei this week to huddling with his counterparts about winding up a TPP agreement by the end of the year. His visit coincides with the 19th round of talks aimed at a new agreement.

TPP has had the attention of the U.S. dairy industry for the past two years, first because of concern that it might allow New Zealand dairy products greater access to the U.S. markets but more recently from hope that it could result in more open markets in Canada and Japan.

The House members, representatives of both parties and mostly milk-producing districts, asked Froman and Secretary of Agriculture Tom Vilsack to push for “a positive outcome for the U.S. dairy industry.” It zeroes in on the “significant market access issues with Canada, Japan, and New Zealand” and the importance of more enforceable sanitary and phytosanitary rules.

Discussions with Canada should aim for removing tariffs and preventing non-tariff barriers from being employed to negate market access for U.S. dairy products, said the letter, organized by Reps. Reid Ribble, R-Wis., and Peter Welch, D-Vt. “In the past, the U.S. has won tariff concessions from Canada only to see those gains impeded through other means, a troubling trend that has only grown in recent years.” Addition of Japan to TPP offers “another meaningful opportunity to secure additional exports of U.S. dairy products,” they said. While Japan already is the fifth largest U.S. dairy export market with $284 million in imports from the U.S. last year, the industry believes that could increase sharply if tariffs and regulatory barriers were reduced.

One of the industry’s major concerns relates to Fonterra’s near monopoly position in New Zealand’s dairy exports. The letter suggests that New Zealand’s government take steps to reform policies that include “special legislation to permit exorbitant market concentration by one company and exclusive access for that same company to the country’s export licenses that lasted for several years.” These policies, it said, have concentrated some 90 percent of New Zealand’s milk supply in Fonterra, “which in turn dominates over one third of global dairy trade.”

More broadly, the letter appeals to U.S. negotiators to seek limits on the use of sanitary and phytosanitary regulations to block food imports. Exporting country officials have a litany of complaints about countries using SPS rules without a scientific basis to protect their industries.

Froman’s personal presence around the borders of the talks illustrates the importance – as well as the difficulty – of concluding on schedule what has been called an “ambitious” and a “21st Century” agreement that would build on the gains made by trade agreements since the end of World War II. He and other trade ministers “will discuss key outstanding issues and chart a course for the expeditious conclusion of a TPP agreement,” his office said last week. “TPP leaders have directed trade ministers and negotiators to seek to complete an agreement this year.”



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