Finance panel to Canada: Trade deal depends on dairy access

Senate Finance Committee leaders on Friday said their support for a sweeping trans-Pacific pact hinges on Canada’s willingness to expand market access to U.S. dairy exports. 

Chairman Orrin Hatch (R-Utah) and top Democrat Ron Wyden (Ore.) told Canadian Ambassador Gary Doer that his nation must agree to significantly expand market access for U.S. dairy exports in any 12-nation Trans-Pacific Partnership (TPP) deal or face the prospect of losing congressional support. 

{mosads}“In fact, our support for a final TPP agreement that includes Canada is contingent on Canada’s ability to meet TPP’s high standards,” they wrote in a letter to Doer. 

Hatch and Wyden expressed concern that Canada, which has been part of the TPP talks for the past three years, “has yet to indicate with respect to dairy that it is prepared to provide the level of market access required to reach a deal.” 

“Canada’s ability to meet the ambition of the other TPP partners and finally commit to significant and commercially meaningful market access for all remaining agricultural products, including dairy, will have a significant impact on Congress’ view of the final agreement,” they wrote.

They argue that for decades Canada has used restrictive tariff-rate quotas on dairy imports, charging upward of 300 percent on imports that exceed volume limits. 

Canada also uses non-tariff barriers, such as applying standards favoring the use of Canadian raw milk in cheese processing over U.S. milk powder.

Trade leaders are already gathering in Maui for what some advocates predict could be the final round of talks to settle TPP’s outstanding issues by the end of the month. 

The National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) praised efforts by Hatch and Wyden as well as a bipartisan group of nearly two dozen House members who sent a letter to Doer last week about the dairy issue. 

“Canada’s highly protected dairy market is one of the final issues in the TPP, and so far its negotiators have refused to live up to their commitment to satisfactorily address it,” said Jim Mulhern, NMPF’s president and CEO.

The dairy groups speculated that Canada could be left behind if they don’t make an acceptable offer next week. 

“We fully agree with this clear congressional message that if Canada is looking for a pass on the type of tough decisions that all other TPP countries are being asked to make, it is better to move TPP ahead without them,” said USDEC President Tom Suber. 

“Our dairy industry is willing to do its part, but Canada needs to do the same if it wants to be part of this agreement,” Suber said. 

Oregon exports about $88 million in dairy products per year, while Utah exports more than $65 million.

Nationally, the United States exports about $7 billion in dairy products annually, nearly half of which are headed for TPP countries.

This story was updated at 4:56 p.m.