The National Milk Producers Federation (NMPF) says it will seek full exclusion of New Zealand's dairy products under the newly-announced Transpacific free trade agreement because of the New Zealand dairy industry's unique structure and excessive manipulation of dairy markets globally and in the U.S.
The Bush Administration announced today that it wants to create a free trade pact with four nations: Chile, Singapore, Brunei and New Zealand. The U.S. already has trade agreements with the first two of these, while Brunei is essentially a small city-state.
The real change as a result of a so-called Trans-Pacific trade agreement between these nations and the U.S. would be to throw open American markets to Fonterra, a large multinational dairy company that works under the auspices of the New Zealand government. NMPF says Fonterra benefits tremendously from the de facto dairy monopoly in New Zealand whereby one company controls more than 90% of the country's milk production.
"New Zealand's government must be salivating at the prospect of getting unfettered access to our consumer markets, even while the U.S. remains constrained by where it can export our dairy products around the world, including to our neighbors, such as Canada,” says Jerry Kozak, President and CEO of NMPF. He says there would be no new opportunities for U.S. dairy exports under a Trans-Pacific agreement, given existing relations with the other significant economic participants.
"Throughout the world, dairy is one of the most protected agricultural sectors and NMPF has been at the forefront leading the charge for reform,” said Kozak. The Trans-Pacific agreement, however, doesn't offer any reform.