USDEC’s president and CEO has been a go-to source this week on issues swirling around The North American Free Trade Agreement. By Margaret Speich and Mark O’Keefe
Top-tier global media outlets have been turning to U.S. Dairy Export Council President and CEO Tom Vilsack for perspective on trade policy issues concerning American agriculture in general and the U.S. dairy industry in particular.
Trade policy has been in the media spotlight this week as President Trump continues to say he will renegotiate The North American Free Trade Agreement. In addition, a new Canadian pricing policy is blocking American dairy exports in violation of NAFTA.
Vilsack, a former U.S. Agriculture Secretary and Iowa governor, has been speaking on behalf of U.S. dairy while providing a broader, historical framework to these issues.
Trump Vows Action on Canadian Dairy Pricing
Last week, USDEC and other dairy organizations asked Trump to take immediate action against Canada’s escalating disregard for its trade obligations under NAFTA. Speaking in Kenosha, Wisconsin, on Tuesday, Trump promised to take on the issue, saying Canada has been “very unfair” to dairy farmers and “we’re going to start working on that.” A New York Times headline summarized his comments this way: “Trump Vows to Solve Dairy Dispute With Canada.”
The bigger trade policy picture
The Financial Times (subscription required), an influential London-based publication devoted to global business and economic news, took a bigger-picture approach, transcending the Canadian issue. Its article addressed broader trade policy issues for U.S. agriculture.
The article pointed out that the Trump administration is missing key players it may need to renegotiate NAFTA. For example, Robert Lighthizer has yet to be confirmed by the Senate as Trump’s U.S. trade representative.
Just before officially joining USDEC in February, Vilsack personally endorsed Trump’s choice of Sonny Perdue, a former Georgia governor, to be the next U.S. agriculture secretary, a position Vilsack held the previous eight years.
Vilsack said in January that Perdue “knows full well the opportunities and challenges that exist in rural communities” and will “work hard to expand opportunity in rural America.”
But Perdue’s confirmation has also been delayed.
How might that impact U.S. dairy exports? Vilsack told The Financial Times that not fully understanding the needs of U.S. agriculture could open Mexico to U.S. dairy competitors from the EU and New Zealand.
How Canada’s policy affects a Wisconsin dairy family
What sometimes gets lost in media coverage of trade policy is how decisions can jeopardize the livelihood of dairy families. The Washington Post made sure that didn’t happen in its article, “The great dairy trade war that will test President Trump.”
The article focused on a Wisconsin family that has two weeks to find a new dairy processing company to buy their milk and sell it into the market. The contract with their existing buyer is a casualty “of an increasingly acrimonious trade war with Canada over the price of ultrafiltered milk, an ingredient in cheese.”
Vilsack was again quoted, making it clear that the U.S. dairy industry needs governmental enforcement of trade agreements.
“Our federal and state governments cannot abide by Canada’s disregard for its trade commitment to the United States,” said Vilsack, adding that Canadian policies “are choking off sales of American-made milk to the detriment of U.S. dairy farmers.”
U.S. Dairy’s Trip to Mexico
In Mexico City last month, Vilsack and other U.S. dairy CEOs addressed uncertainty about NAFTA, a 1994 agreement that systematically eliminated most tariff and non-tariff barriers to free trade and investment between the the United States, Mexico and Canada.
Since passage of NAFTA, U.S. dairy exports to Mexico have increased 558 percent, to $1.2 billion last year, making Mexico our No. 1 customer.
“Please understand that our industry, together with most of the U.S. agricultural sector, is working hard to impress upon President Trump and his key advisers the importance of maintaining strong trade ties between our nations,” Vilsack told 1,200 attendees at The National Dairy Forum, sponsored by the Mexican Federation of Milk Producers (Femeleche). “Whatever comes out of future trade negotiations with Mexico and Canada, there can be NO backtracking on the important achievements of NAFTA.”