WASHINGTON — In a positive development for the U.S. dairy industry, President Barack Obama late Friday announced the successful completion of bilateral talks with South Korea that pave the way for U.S. acceptance of the expansive free-trade agreement. Through August 2010, the value of U.S. dairy exports to South Korea was $84 million, up 78 percent from the same time period last year. The U.S. International Trade Commission estimates that the dairy provisions of the agreement could expand U.S. dairy exports by up to $336 million per year on average.
"IDFA thanks the Administration and U.S. Trade Representative Ambassador Ron Kirk for their significant efforts throughout the negotiations. We're pleased that the full dairy provisions of the agreement were able to remain unaltered in the finalized agreement," said Connie Tipton, IDFA president and CEO. "IDFA considers the agreement to be a critical step forward for U.S. dairy processors to take full advantage of growing markets in a vital economic region."
The agreement is expected to provide a tremendous boost to U.S. dairy through reduced tariffs and expanded market opportunities in a very restricted and high-value market. In 2009 South Korea constituted the United States' sixth-largest export market for dairy and dairy products. Once implemented, the agreement will allow the U.S. dairy industry to gain immediate open access for whey for feed uses, as well as tariff-free access for approximately 16,000 metric tons of cheese, milk powders, whey for food uses and other important dairy products. Tariffs on most dairy products will eventually be phased out over a period of 15 years.
South Korea is one of Asia's fastest growing economies, and global consumption patterns show that as income grows, the consumption of animal protein increases, including dairy. Per capita consumption of dairy products in South Korea is increasing mainly due to the younger generation and an increasing penchant for Western foods. Along with this growth, expanding wine consumption is expected to increase demand for a variety of high-quality cheeses. According to the U.S. Department of Agriculture, most increased demand will be met by imports because local production of cheese is constrained by the lack of manufacturing facilities. Thus, U.S. dairy exports are uniquely positioned to fill a specific consumer demand that local manufacturers are not able to supply.
Congress will still need to ratify the agreement for it to take effect, and IDFA urges legislators to make passage of the agreement a top priority.
The International Dairy Foods Association (IDFA), Washington, D.C., 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 organizations: 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 organizations to single-plant companies. Together they represent more than 85 percent of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States.
Source: International Dairy Foods Association
