Trans Pacific Partnership Would Be a $1.5 Billion Net Gain for Dairy
The International Trade Commission (ITC) reported this week the Trans Pacific Partnership (TPP) would be a $1.5 billion net gain for the U.S. dairy industry by 2032, with total U.S. dairy output growing 1.3%.
The report estimates dairy exports to TPP countries would grow by some $1.846 billion while imports would increase by roughly $350 million. In percentage terms, dairy exports to TPP countries would grow 18% while imports would grow 10%.
The ITC says the greatest export opportunities offered by TPP are to Canada, Japan and Vietnam. “But U.S. exporters would still face restrictive tariff rate quotas (TRQ) for certain products in large TPP markets such as Japan and Canada that would limit the growth of U.S. exports even after full TPP implementation,” states the report.
On the import side, trade partners would be granted additional access. But the ITC says many of the additional TRQ volumes granted under the agreement would likely not be filled. That’s because countries such as Canada and Peru are already net importers of dairy products, and would have limited products to export.
The ITC also does not see a threat from New Zealand, even though it would be granted more access, especially as the agreement progresses 15 and 20 years down the road. “Exporters such as New Zealand produce dairy products more suited to China and other Asian markets, such as whole milk powder, a product not demanded in high volumes in the United States,” says the report. Plus, the U.S. dairy industry is highly competitive in other products New Zealand might want to export.
For their part, TPP is a historic pact, say Tom Suber, president of the the U.S. Dairy Export Council and Jim Mulhern, president and CEO of the National Milk Producers Federation, in a joint statement issued this morning. They add: "Included in the deal are ground breaking new commitments on sanitary and phytosanitary issues and significant improvements in how geographical indications (generic trade names) are handled.
"But the benefits of the TPP can only be realized is the United States assures that signatories live up to their commitments under the agreement as well as their prior trade agreement."
Read the full report here. The dairy summary starts on page 129.