"We have always seen Mexico as a partner first and a customer second," USDEC president and CEO, Tom Vilsack, told Mexican dairy leaders attending the National Dairy Forum in Mexico City.
"That's why we intend to continue working with you and your industry to expand the consumption of dairy products in a way that benefits both countries."
Vilsack was joined by Jim Mulhern, president and CEO of the NMPF, and Michael Dykes, president and CEO of the IDFA.
Importance of NAFTA and where it stands
The visit to Mexico City comes at a time of political uncertainty for the US and Mexican dairy industries, particularly in regards to the future of NAFTA.
“We have weighed in on this point with the new administration and with members of our Congress,” Vilsack said during his speech.
“For the sake of our continued partnership, we will continue to oppose any consideration of pre-NAFTA tariffs to the supply chain, whether it’s on feed grains, high-value dairy ingredients or specialty cheeses.”
Since NAFTA became law in 1994, US dairy exports to Mexico have more than quadrupled to $1.2bn, making Mexico the US dairy industry's No. 1 export market, accounting for nearly one-fourth of all US dairy exports last year.
Since the implementation of NAFTA, the $185bn increase in exports to Mexico has corresponded to an additional 5m US jobs.
Also under NAFTA, Mexico and the US jointly persuaded Mexican authorities that “mozzarella” and “parmesan” should not be protected as geographical indications and should be considered common terminology for cheese products.
Milk production in Mexico has expanded from just fluid milk to cheese, yogurt, milk powder, and dairy ingredients.
Future goals between US and Mexico
“NAFTA is 23 years old now and it could use a face lift,” Vilsack said. “Our industry is certainly open to exploring ways to preserve and strengthen NAFTA.”
Vilsack pointed to other US free trade agreements that include stronger provisions in areas such as sanitary and phytosanitary measures in agriculture, labor rights, the environment, regulatory coherence, intellectual property rights, services, investment and e-commerce.
At the top of its list is tackling Canadian dairy tariffs and nontariff barriers, issues that have not been properly addressed yet.
Vilsack also warned Mexico to remain cautious with opening up its market to other dairy suppliers who may be more interested in spot sales rather than a long-term partnership.
“The US dairy industry is fighting hard to ensure that NAFTA is here to stay,” he added.