Dairy producers support the U.S.-Mexico-Canada Agreement that went into effect in July, but they also want to make sure that provisions to help their industry are implemented as intended.
Rep. Xochitl Torres Small, D-Las Cruces, a member of the U.S. House of Representatives Agriculture Committee, is one of eight signatories to a bipartisan letter sent Thursday to U.S. Trade Rep. Robert Lighthizer and U.S. Secretary of Agriculture Sonny Perdue asking that they ensure that Mexico and Canada “deliver on their obligations” and live up to the “spirit and the letter of the agreement.”
The letter also was signed by about 90 other senators and representatives.
“Earlier this month, we received a briefing in the Ag Committee from the U.S. Trade Representative Office about how Mexico and Canada were implementing the enforcement regulations,” Torres Small said. “It reinforced some of the concerns that I had about Canada and making sure that it is holding up its end of the deal.”
As soon as the trade agreement took effect, the U.S. Dairy Export Council and the National Milk Producers Federation were issuing a joint statement expressing worries that some provisions might not be implemented as intended, which would hurt the U.S. dairy and cheese industry.
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“It is critical that the U.S. Trade Representative and U.S. Department of Agriculture utilize USMCA’s stringent enforcement measures to ensure Canada and Mexico are held accountable to their trade commitments,” the groups said.
Torres Small said that southeastern New Mexico dairy producers have told her that the issues affect them as well, even if they don’t trade internationally. She said milk prices are determined by international trade and that shifts of even a few cents a gallon can have a big effect to New Mexico producers.
She explained that two concerns are about concessions agreed to by Canada. One is about making sure that the country eliminates its Class 6 and Class 7 product and pricing categories, as agreed upon. Those categories make it difficult, if not impossible, she said, for U.S. producers to sell certain products, such as powdered milk.
The other has to do with tariff rate quotas, with dairy associations noting at the beginning of the USMCA implementation that Canada has just instituted new guidelines that ran counter to the trade agreement.
“They have agreed to increase the tariff rate quota, so that more U.S. dairy products could get exported to Canada before they cost more in Canada,” she said. “But we are concerned about how they are implementing that increase. There is a concern that they are going to implement the increase so that it looks like there is an increase on paper but there isn’t an increase on the ground. They are allocating to certain producers who have no intention of buying more U.S. imports.”
The Congressional letter also describes a concern with provisions that pertain to Mexico and cheese imports.
Those agreements protect common cheese names, such as feta and parmesan. The dairy groups want to make sure those agreements are upheld and that new rules about product conformity to fit those names are not introduced to make it difficult for U.S. exporters to sell in Mexico.
According to those dairy groups, the International Trade Commission has estimated that U.S. dairy exports will increase by more than $314 million a year if the USMCA is implemented as intended. Dairy farm revenue also is expected to increase by $548 million during the first six years.
Chaves County is the top milk producer in the state, with just more than 2 billion pounds produced in 2018. New Mexico is the ninth largest milk producer and the fourth largest cheese producer in the nation, according to statistics published by the New Mexico Department of Agriculture.
Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at email@example.com.