Concerns About New Dairy Import Tax

US - The president and CEO of the International Dairy Foods Association has expressed concerns about the impact that the implementation of controversial new assessments on dairy imports will have on trade.
calendar icon 21 March 2011
clock icon 2 minute read

"We trade with more than 150 countries and continually advocate for open markets and trade policies that comply with international laws," said Connie Tipton, IDFA president and CEO. "This international tax does not help expand our US dairy export markets and has been widely opposed by our trading partners."

Last week, the Obama administration reversed a pro-trade decision of the Bush administration when the US Department of Agriculture announced the final rule on the establishment of a dairy import assessment. The programme was first authorised in the Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) and later amended in the Food, Conservation and Energy Act of 2008 (2008 Farm Bill), with clear instructions from Congress that the programme was not to be implemented if it did not comply with US trade obligations.

"With this decision by USDA, we are concerned about how other countries will respond to our dairy exports once they become aware of the extra administrative burden and cost with limited or no benefits," said Ms Tipton.

USDA will now collect 7.5 cents per hundredweight on imported dairy products and other foods with dairy ingredients, including cocoas and dough. The money collected by the government will be turned over to an advertising and promotion programme currently operated and funded by US dairy farmers. The new rule stipulates that, because importers are adding additional funding to the program, USDA will require US dairy producers and importers to jointly develop programs to build demand for imported dairy products and dairy ingredients.

"It's unclear to us why dairy producers are willing to promote dairy imports at a time when US dairy imports are declining and our US exports are growing," said Ms Tipton.

The International Dairy Foods Association (IDFA), Washington, DC, represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 550 companies representing a $110-billion a year industry. IDFA is composed of three constituent organisations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA's 220 dairy processing members run more than 600 plant operations, and range from large multi-national organisations to single-plant companies. Together they represent more than 85 per cent of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States.

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