Dairy trade deals boost U.S. exports

New Latin American frameworks support smoother US dairy trade

U.S. dairy farmers and processors are welcoming new trade frameworks with Argentina, Ecuador, El Salvador and Guatemala that are designed to support future export growth across Latin America. The U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) praised the agreements, saying they create a stronger platform for long term dairy trade. 

“U.S. dairy exports to U.S.-Central America-Dominican Republic Free Trade Agreement partners have almost doubled over the past five years. The frameworks the administration has negotiated with Guatemala and El Salvador position our exporters to really capitalize on that landscape during the first duty-free year of dairy trade under the CAFTA-DR trade agreement by ensuring that nontariff trade barriers don’t slow our progress,” said Gregg Doud, president and CEO of NMPF.  

“Non-tariff barriers tend to sprout up like weeds when tariffs disappear, which is why these commitments are so important in this region. The nontariff commitments announced with Argentina and Ecuador also may help resolve multiple long-standing issues in those markets. Dairy farmers look forward to seeing the details on them as well as on the tariff commitments the deals include.” 

Leaders note that U.S. dairy exports to Central America and other U.S. Central America Dominican Republic Free Trade Agreement (CAFTA DR) partners have almost doubled over the past five years. This year, all CAFTA DR dairy tariffs were finally removed. However, when tariffs disappear, non tariff barriers such as complex paperwork or licensing rules can grow and make trade harder. 

“The U.S. Dairy Export Council has been keenly focused on maximizing export opportunities into our FTA partner markets so that we make the most of markets where we have a level playing field against other competitors. Central America has been a key part of that strategy of growing our exports of cheese and other dairy products and creating partnerships that have been crucial to the economic wellbeing of our dairy farmers, which is why these frameworks with Guatemala and El Salvador are particularly welcome,” said Krysta Harden, president and CEO of USDEC.  

“Ecuador has the potential to be a good market, but too often nontariff barriers have impeded access to this and other markets where opportunities exist. The commitments the administration has secured on these topics in Latin America are crucial to avoiding those problems. Dairy exporters and farmers hope that the Argentina and Ecuador deals will deliver predictable access and also include additional market access, especially for dairy ingredients and cheese.” 

The new frameworks with Guatemala and El Salvador aim to prevent that. They include faster product registration for U.S. dairy exports, removal of apostille requirements, and commitments to keep using existing dairy certificates. They also say that market access will not be blocked just because a product uses certain common cheese terms. In addition, the countries promise more transparency and fairness on geographical indications for cheese names. 

The framework with Argentina commits to not requiring facility registration for U.S. dairy products, to avoiding restrictions on products that use certain cheese terms, and to providing preferential access for a wide range of U.S. agricultural goods. 

The framework with Ecuador focuses on reforming import licensing and facility registration systems for food and farm products. It also includes commitments to avoid blocking market access over cheese terms and to reduce or eliminate tariffs on some farm goods, while creating tariff rate quotas for others. 

Last year U.S. dairy exports to Guatemala and El Salvador reached about 127 million and 50 million dollars. Sales to Ecuador and Argentina were much smaller, partly because there is no full trade agreement yet. These new frameworks are expected to help open those markets and support more stable opportunities for U.S. dairy farmers. 

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