Dairy Organisations Applaud US-Russia Trade

US - The National Milk Producers Federation (NMPF) and the US Dairy Export Council (USDEC) applauded this week’s introduction of legislation to extend Permanent Normal Trade Relations (PNTR) to Russia.

15 June 2012

3 minute read

North America

Senator Baucus (MT), Finance Committee Chairman; Senator John Thune, International Trade Subcommittee Ranking Member; Senator John Kerry, Foreign Relations Committee Chairman; and Senator John McCain, Armed Services Committee Ranking Member, introduced the bipartisan legislation in order to enable US companies to expand exports to Russia when it joins the World Trade Organisation (WTO) this year.

Russia is expected to complete the necessary administrative and regulatory changes and thereafter to actively join the WTO this August. Those commitments include provisions relating to agricultural trade, which NMPF and USDEC believe will yield significant improvements in tariff levels as well as in how Russia deals with various regulatory requirements for imported dairy products.

In order to ensure that US companies will be able to take full advantage of those improved policies, Congress must pass PNTR and graduate Russia from the Trade Act of 1974's Jackson-Vanik amendment. The latter was designed to strongly encourage the Soviet Union to permit the emigration of Jews and prisoners of conscience, a goal that was achieved decades ago.

“US dairy exports have been blocked from the Russian market for almost two years due to ongoing dairy certificate negotiations,” said Tom Suber, president of USDEC.

“Congressional passage of PNTR with Russia and repeal of the Jackson-Vanik amendment with respect to Russia is necessary to ensure that we are able to fully avail ourselves of the strong WTO accession package negotiated by the United States with respect to agricultural trade with Russia. We believe PNTR is critical to helping US dairy companies re-enter this market on workable trading terms.”

“Russia is one of the world’s largest dairy importers and therefore is a vital destination for US dairy products,” agreed Jerry Kozak, president and CEO of NMPF.

“At a time when Russia and its Customs Union partners are seeking to ensure that imported foods are of high-quality, the United States should be a clear preferred supplier given the strict food safety and milk quality requirements in place in our country.”

Both organizations urged Congress to move ahead swiftly with approval of PNTR and repeal of Jackson-Vanik in order to help expand export opportunities for US dairy. Last year, Russia imported a total of $2.1 billion from the world, making it a key destination for butter, cheese and other high-value dairy products. The United States continues to expand exports around the world, and access to all markets is critical to the industry’s ability to grow. Membership in the WTO will ensure that Russia is required to play by international rules or face the prospect of legal challenges to their system, a resolution avenue that the United States cannot utilize until it establishes full PNTR without restriction.