Dairy cows

Cows are milked at a California dairy. Milk production is up, casting a shadow over prices.

U.S. dairy says New Zealand has too many advantages

By CAROL RYAN DUMAS

Capital Press

President Barack Obama's intention to negotiate a regional Asia-Pacific trade agreement has dairy groups voicing their concerns to U.S. Trade Representative Ron Kirk.

U.S. dairy producers and exporters are urging the government to exclude any dairy-related changes in the trade relationship between the United States and New Zealand as part of the new free trade agreement.

The National Milk Producers Federation and the U.S. Dairy Export Council say U.S. dairy already has trade agreements with four of the seven foreign countries involved and including dairy in any agreement with New Zealand would severely harm the U.S. industry.

Tom Suber, Dairy Export Council president, said if the agreement goes through as New Zealanders would like it to, it would give that country substantially more access to U.S. markets. New Zealand already has advantages as the world's largest dairy exporter and through the monopoly held by one company, Fonterra, which controls more than 90 percent of that country's milk production.

The proposed Trans-Pacific Partnership Free Trade Agreement would eventually eliminate all tariffs between the participating countries, giving New Zealand even more access to U.S. markets.

"We ship nothing to them, and they ship a lot to us," Suber said. "They'd like to ship more to us because of our high prices."

New Zealand provides 30 to 35 percent of world dairy trade, is among one of the lowest cost producers and is the largest supplier to the United States, he added.

While the country can't supply the world, the groups are convinced New Zealand would surrender some of its lower-priced markets and concentrate more on U.S. markets.

"The heightened prospect of greater exploitation by New Zealand of not only global markets, but also our domestic industry and policy, would make an already uneven playing field in the global markets worse," said Jerry Kozak, president and CEO of NMPF.

Although an agreement that included Vietnam would offer some new export opportunities, they would not come close to offsetting the negative impact to the U.S. dairy industry being forced to compete on an uneven playing field against New Zealand, Suber said.

"If Japan or China were in it, it might be worth the trade-off," he said. As is, however, "it's inappropriate to fair trade."

Suber said U.S. dairy supports balanced trade agreements and calling for the exclusion is not an anti-trade position.

"There's only one way to deal with such a unique and monopolistic situation," Kozak said, "and that is through an equally unique response -- full exclusion of all U.S.-New Zealand dairy trade."

Online

National Milk Producers Federation: www.nmpf.org

U.S. Dairy Export Council: www.usdec.org

Trans-Pacific Partnership Free Trade Agreement

* A proposed free trade pact would include the United States, Australia, Chile, Singapore, Peru, Brunei, Vietnam and New Zealand.

* The United States already has trade agreements with these countries, except for New Zealand, Vietnam and Brunei.

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