The U.S.-Mexico-Canada Agreement went into effect July 1 and was supposed to allow U.S. dairy producers greater access to the Canadian market.
But Canada’s recent announcement on how it will allocate tariff-rate quotas, which set a maximum amount of tariff-free dairy that can be imported into Canada, has U.S. dairy industry groups saying the allocations have actually discouraged “high-value food service or retail products from entering the market,” according to the U.S. Dairy Export Council and National Milk Producers Federation.
Torres Small, who supported the trade deal, signed on to a bipartisan House of Representatives letter last week to U.S. Trade Representative Robert Lighthizer and U.S. Secretary of Agriculture Sonny Perdue, urging them to use enforcement mechanisms available in the new trade deal to truly allow dairy producers access to the Canadian market.
“One of the things that USMCA did was provide stronger enforcement mechanisms to make sure the deal on the ground is as good as the deal that was made on paper,” the congresswoman said.
“The recent entry into force of the United States-Mexico-Canada Agreement (USMCA) holds the promise of new export opportunities for America’s dairy industry and institutes fairer trade rules to ensure that American-made dairy exports can compete on a more level playing field and reliably access our neighboring trading partners,” the letter reads.
“We urge you to act swiftly to use USMCA’s consultation and enforcement measures to ensure that Canada and Mexico deliver on all their obligations related to dairy products in a way that is fully consistent with the spirit and letter of the agreement,” it continues.
Torres Small said that even if producers in New Mexico don’t directly trade with Canada, opening Canadian markets up to U.S. producers increases the price of milk. Higher milk prices can help local dairy producers weather the ongoing economic crisis as a result of the COVID-19 pandemic, she said.
Dairy is New Mexico’s largest agriculture commodity and the state is ninth in the nation in dairy production. The state recorded $1.21 billion in milk sales in 2018.
The International Trade Commission estimates American dairy exports will increase by more than $314 million per year if the USMCA is implemented as it was negotiated.
“A strong demand for U.S. dairy exports abroad drives economic growth and creates jobs here at home,” said Tom Vilsack, president and CEO of the U.S. Dairy Export Council, in a press release. “USMCA is designed to allow the U.S. industry to fulfill this demand from two of our largest dairy customers and we cannot allow Canada or Mexico to undermine the important gains secured in this trade deal.”
Agriculture and Agri-Food Canada — the Canadian government’s department which oversees agriculture — didn’t return a request for comment.
“The support for today’s bipartisan letter demonstrates the incredible impact the U.S. dairy industry has across the country, supporting our rural economies and fulfilling an essential role in feeding America,” Jim Mulhern, president and CEO of the National Milk Producers Federation, said in last week’s release.
The congresswoman joined the House Committee on Agriculture in February and has co-sponsored a bill that could help New Mexico’s dairy producers have greater access to foreign workers on visas.
