National Journal's CongressDaily / April 6, 2001 / By Jerry Hagstrom
In a dramatic trade-policy turnaround, the National Milk Producers Federation said Thursday it favors presidential trade negotiating authority only if "due consideration" is given to adverse economic impacts of trade agreements on the dairy sector.
The milk producers told the House Agriculture Committee that "trade promotion authority should not be given as a blank check to promote trade agreements based purely on 'national security' or political pay-outs."
The milk producer showed enthusiastic support for free trade in the 1996 farm bill debate and at many hearings on presidential trade-negotiating authority--or fast track--in previous years. But now it says producers are suffering from competition from imports of New Zealand milk protein concentrate.
The New Zealand product was not subjected to tariffs or quotas in the Uruguay Round because the technology to produce it was "in its infancy" when the agreement was signed.
But six years after Uruguay, U.S. imports of milk protein concentrate have risen more than 600 percent, while other nations are jealously guarding their markets against any milk protein products coming in.
"You could drive a milk truck through the tariff schedule" for dairy products, NMPF CEO Jerry Kozak said at the hearing, part of a series House Agriculture Chairman Combest is holding on the future of farm policy.
The group also said the United States "must maintain and support our programs regardless of their categorization" under World Trade Organization definitions of agricultural subsidies that distort free trade.
NMPF also said Congress should provide an additional $20 million per year each to the USDA Foreign Agricultural Service and the Office of the U.S. Trade Representative. The funds would be used to monitor other countries' compliance with trade agreements, limit imports of milk protein concentrate and another dairy concentrate, renegotiate milk protein concentrate tariffs, better fund the Dairy Export Incentive Program and extend all food aid programs.
Kozak also presented proposals for improving the dairy safety net and acknowledged that the group's proposals would raise the amount of dairy subsidies classified as most trade-distorting by the WTO in some years by $1.8 billion to $6.3 billion.
But Kozak noted that with adjustments in the category of subsidies used for other commodities--such as sugar and peanuts--"the small increase" for dairy should not affect U.S. commitments to the WTO to limit its most trade-distorting subsidies to $19.1 billion per year.
Copyright 2001 The National Journal Group, Inc.:
