With the Washington dairy industry contributing billions of dollars and thousands of jobs to the state’s economy, farmers need a modernized North American Free Trade Agreement, plus other free-trade pacts, to compete on a level field.
The Washington state dairy industry contributes nearly $4 billion a year to the state’s economy and provides more than 18,800 jobs. In fact, dairy is part of a booming food and agriculture sector that is creating more than 736,700 jobs and is providing a $69 billion economic stimulus to the state. But a U.S. withdrawal from the North American Free Trade Agreement (NAFTA) and other free-trade agreements puts this economic sector at risk.
Nationwide, U.S. dairy companies employ nearly 1 million skilled individuals and generate more than $39 billion in direct wages. With demand for nutritious dairy products globally on the rise and the capacity here at home to sustainably expand production, free-trade agreements are crucial to a thriving U.S. dairy industry and adding thousands more American jobs.
I strongly support efforts to modernize NAFTA. It must continue to provide duty-free access to Mexico, our largest foreign market, and we must gain access to Canada’s dairy market, which was excluded from NAFTA when it was first negotiated nearly a quarter century ago.
In Mexico alone, the United States is the dominant dairy supplier, capturing close to 75 percent of that market. Dairy exports to Mexico support nearly 30,000 American jobs.
In Canada, not only do U.S. dairy exports face extremely high tariffs, but Canada has recently created a new pricing policy that keeps domestic consumer dairy prices high, while simultaneously undermining global markets for dairy ingredients, and exporting those ingredients far below the prevailing world price. This not only keeps Washington and other U.S. dairy products out of Canada, it has effectively blocked some U.S. dairy exports to other markets around the world. NAFTA negotiations present an opportunity to stop these unfair practices.
A proactive global trade agenda is an economic imperative. As the United States focuses solely on NAFTA, other countries are aggressively forging new trade deals, both bilaterally and multilaterally, with the new Trans-Pacific Partnership (TPP) going ahead without us. These agreements provide our competitors access to consumers in a fast-growing middle class that should be our natural market. The completion of the free-trade agreement between Japan and the European Union is an example of falling behind, with the new TPP deal simply the latest in a string of setbacks.
Meanwhile, the European Union, as well as Australia and New Zealand, are expanding their global reach through negotiations with Canada and Vietnam, and the Pacific Alliance.
U.S. dairy and agribusiness are the most competitive in the world, but that does America little good if we continue to face high tariffs and a range of non-tariff barriers designed to keep our products out of international markets. U.S. trade negotiators are able and working hard on NAFTA, but I urge them to aggressively and simultaneously pursue a level playing field for U.S. dairy products and agriculture everywhere else.