Global Trade Pacts Progress without US Dairy

As the United States takes a different direction on trade policy, several countries are forging ahead with new pacts, giving preferential market access to other trade players and changing the landscape for U.S. dairy products abroad.

Most recently, the European Union (EU) announced it will begin negotiations on a free trade agreement with Australia and will hold trade talks with New Zealand in the future. The EU will likely ask both countries to embrace geographical indications (GIs) for products like cheeses, limiting several common names to EU-only use. Australia and New Zealand have historically voiced strong support for ensuring the appropriate use of GIs, but these protections are a top EU trade priority, so it is unlikely that deals will be reached with Australia or New Zealand without them.

 

The first round of negotiations for the EU-Australia free trade agreement will begin in early July in Brussels. The EU and New Zealand are currently in the process of setting up the guidelines for their negotiations and formal meetings will likely start before the end of 2018.

Landscape Changing in Asia-Pacific Region

Countries in the Asia-Pacific region are also pursuing trade agreements, which will change the landscape in one of U.S. dairy’s fastest-growing export markets.

 

After years of negotiation, the 15 countries participating in the Regional Comprehensive Economic Partnership (RCEP) will likely conclude the free trade agreement by the end of this year. The partners are Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, Philippines, Singapore, South Korea, Thailand and Vietnam. The agreement is not expected to include standards for protecting workers or battling corruption, and those omissions, among others, could make it more difficult for the United States to work with these trading partners or demand higher standards in future trade agreements.

 The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a modified version of the Trans-Pacific Partnership agreement that emerged after the United States withdrew, may be implemented as early as the end of this year or the beginning of 2019. Several countries still must ratify the agreement through their national governments. The countries that make up the CPTPP are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

This region is extremely valuable for U.S. dairy exports. Japan, for example, represents the industry’s fourth largest market and accounted for U.S. dairy sales of more than $290 million in 2017.

IDFA has stressed to the administration and Congress that trade agreements with markets in the Asia-Pacific region are critically important to the continued growth of the U.S. dairy industry. IDFA will continue to work with federal officials and members of congress on expanding opportunities for dairy in new trade agreements and seeking more market access for dairy products abroad.

For additional information, contact Beth Hughes, director of international affairs, at [email protected].