The organisation has filed two set of comments with the US Trade Representatives (USTR) and the US International Trade Commission (USITC), outlining how foreign government policies in the European Union (EU) and Canada are set to undermine the competitiveness of American dairy manufacturers and exporters.
In its comments to the USTR, the IDFA raised concerns about the potential impact of the European Union’s Carbon Border Adjustment Mechanism (CBAM), which applies fees on certain carbon-intensive imports. While the dairy sector is not covered it argues that as US dairy processors rely on specialised European made machinery and equipment it could increase steel and aluminium costs which could be passed onto the US dairy sector.
“If CBAM fees are applied to additional materials, components or machinery, the resulting costs could be passed to US importers and customers,” said Becky Rasdall Vargas, IDFA senior vice president of trade and workforce.
“Many dairy manufacturers rely on equipment and components from suppliers in Europe, making it critical that policymakers fully consider the impact on US manufacturing costs and supply chains.”
This isn’t the first time the organisation has raised concerns about the EU. It has already warned that the European due-diligence requirements and audits are increasing costs for US dairy processors and farmers and has called on the government to take action.
In a separate document IDFA recommended to USITC to support transparent, evidence-based procedures for evaluating discriminatory foreign trade policies.
It was making recommendations to the Section 338 of the Tariff Act of 1930 which allows the US president to impose duties of up to 50% on imports from countries deemed to have discriminated against US commerce.
The USITC requested input on how it should define “discriminatory” or “unreasonable” actions against US commerce in the future.
IDFA highlighted examples of foreign policies that undermine US dairy competitiveness, including Canada’s dairy pricing system and EU regulations such as the Corporate Sustainability Due Diligence Directive and CBAM.
IDFA also highlighted Canada’s milk-class pricing policies which it said result in below cost-of-production prices for certain milk proteins and non-fat milk solids, making commercially viable US dairy imports less competitive in the Canadian market.
“IDFA appreciates the Administration’s efforts to use all available trade tools to bolster American manufacturing,” said Rasdall Vargas.
“At the same time, those tools should be applied transparently and with clear standards and safeguards that ensure stable trading conditions for US dairy companies. IDFA supports efforts to address foreign policies that hurt American competitiveness while also establishing a clear and predictable framework for future uses of Section 338.”
