THE TTALK QUOTES


On Global Trade & Investment
Published By:
The Global Business Dialogue, Inc.
Washington, DC  Tel: 202-559-9316
No.8 of 2020
THURSDAY, FEBRUARY 6, 2020

Click HERE for Tuesday's quote from John Dickerman, Confederation of British Industry
U.S.-UK TRADE: DAIRY WANTS A DEAL

 "Our industry is certainly quite enthusiastic about the prospect of a U.S.-UK deal."

Shawna Morris
January 28, 2020
AN APPRECIATION
GBD is grateful to those who helped make possible the event, Beyond Brexit , that gave rise to today’s quote. We especially wish to thank

The National Pork Producers Council
for Sponsoring this event,

The Information Technology Industry Council
for Supporting this event, and

Corning
for being a Friend of the Event.
CONTEXT
Shawna Morris is the Vice President for Trade Policy at both the U.S. Dairy Export Council and the National Milk Producers Federation. Speaking on the panel at GBD’s January 28 event, Beyond Brexit, she laid out some of what America’s dairy sector hopes can be achieved in a U.S.-UK trade agreement. Today’s featured quote highlights her upbeat view of these talks. And that quote was part of this paragraph:

Representing U.S. dairy farmers with the National Milk Producers Federation, both the dairy farmer and processor side with the U.S. Dairy Export Council, I have to say that our industry is certainly quite enthusiastic about the prospect of a U.S.-UK deal. We, right now, have a pretty sizeable trade deficit in dairy products, with the UK exporting considerably more to the U.S. than we send in terms of the dairy products to the UK. And we see an agreement as a particularly strong opportunity to create a more level playing field, so that trade can more naturally flow as dictated by market demand. 

Issues affecting trade in goods generally fall into one of two broad categories: tariff issues and non-tariff barriers. The tariff side of things has gotten awfully complicated in the last year or so, from President Trump ’s national security tariffs on steel and aluminum (and the foreign retaliation in reaction) to the more recent imposition of U.S. tariffs against EU cheeses, spirits, and other products as a result of the WTO rulings in the Airbus-Boeing case. Ms. Morris largely stayed away from tariffs in her talk, but it is a topic GBD expects to focus on again … and soon.

The Science Issues . Looking ahead to trade negotiations between the United States and the United Kingdom, Ms. Morris focused in particular on two categories of non-tariff barriers: i) sanitary and phytosanitary standards, and ii) geographical indications. With respect to the first of these, the sanitary and phytosanitary requirements, Ms. Morris’s complaint was not with the fact that U.S. products need to be accompanied by certifications – her members, she said, are used to that – but rather to the fact that the EU’s requirements are highly specific and change with some frequency. “This poses a concern for us,” she said, “because every time those types of paperwork issues change, that puts at risk whether we’re going to be able to ship to the market.” The fact that there is really no challenge to the safety of U.S. products makes those issues all the more frustrating.

Though formal negotiations have yet to begin, USTR published its objectives for a negotiation with the United Kingdom a year ago. It is likely that the U.S. dairy industry was consulted in the formulation of those goals. In any event, there is a rich section on Sanitary and Phytosanitary Measures (SPS). Interestingly, it is not restricted America’s trade with the United Kingdom. According to that February 2019 Summary of Specific Negotiating Objectives, it is also a U.S. goal to

Obtain commitment that the UK will not foreclose export opportunities to the United States with respect to third-country export markets, including by requiring third countries to align with non-science based restrictions and requirements or to adopt SPS measures that are not based on ascertainable risk.

Geographical Indications:  On this issue, it is worth quoting Ms. Morris at length. She said:

On a more emotional front, though, I’d say is the issue of geographical indication. Our industry has had to contend with this for many years now, facing barriers on the types of products that we can export into the European Union, including the UK. And increasingly, [we face] barriers on what we can export to a number of other markets around the world [as] a direct result of EU GI policies. These are bans on things such as shipping accurately labeled parmesan, feta, asiago, and other products. 

Again, I come back to the fact that our interests here and our take on the topic really is not, fundamentally, extremely different from [what] we have heard voiced by the UK industry or UK government over the years. The UK’s approach to dealing particularly with food geographical indications has been a very reasonable one. West Country Farmhouse Cheddar being a great example of ensuring that everyone can continue to use the generic word “cheddar” versus asserting, as some other Member States have, that [cheddar] now should be monopolized and only for use by British food makers.

At several points in her presentation, Ms. Morris mentioned the earlier TTIP negotiations with the European Union, TTIP standing for Trans-Atlantic Trade and Investment Partnership. It was a contrast she returned to in her closing remarks, when she said:

We should be very much focused on working to maximize the opportunity that negotiating specifically just with the UK presents here versus a much, much more challenging task that we had in negotiating with all 28 Member States during TTIP.
COMMENT
We have nothing to add to the thrust of Ms. Morris’s comments, but there is one thread we would like to follow just a bit and another where we can at least point to a path to be explored later.  

Cheddar. The first of these has to do with cheddar cheese. We found the Wikipedia entry on this cheese fascinating. We are told that cheddar cheese originated in the village of Cheddar in Somerset, England, and that, as it happened, the caves of the Cheddar Gorge turned out to be ideal places for aging it. Be that as it may, cheddar cheese is a global product. You can find it made in Austria, South Africa, Australia, New Zealand, Canada, Finland, and the United States, and that’s not the full list. Tillamook Cheddar Cheese is a popular brand here in Oregon.

Doubtless, all those producers are grateful that cheddar is still being treated as a common food name. In the words of the Wikipedia author(s):

The term cheddar cheese is widely used but has no protected designation of origin within the European Union. However, in 2007, a Protected Designation of Origin, “ West Country Farmhouse Cheddar ,” and only Cheddar produced from local milk within Somerset, Dorset, Devon, and Cornwall and manufactured using traditional methods may use the name.

UK-EU Trade . We confess we looked for cheese in two places this afternoon, the refrigerator, which was a wholly satisfactory investigation, and the on-line world. There we found winding roads we did not have time to follow. The start of one such road was a Mintec blog by George Duke . Published just a year ago, it discusses dairy trade between the UK and the rest of the EU. Part of that trade, Mr. Duke tells us, involves “the vast volumes of UK raw milk sent to Ireland for processing, only to be imported back to the UK.” If the UK and the EU fail to get a trade deal this year, that trade, like many other arrangements will be disrupted by tariffs. 

SOURCES & LINKS
Dairy Wants a Deal is a link to GBD’s transcript of Shawna Morris opening remarks at the GBD event Beyond Brexit , which was held at the National Press Club in Washington on January 28. This was the source for today’s featured quote as well as several of the others.

Beyond Brexit is a link to the page of the GBD website with materials from this event, including audio recordings.

About Cheddar Cheese is a link to the Wikipedia article mentioned above.

UK-EU Dairy Trade takes you to the George Duke blog mentioned above.

The Cheddar Gorge is the Wikipedia entry on this geological setting for the origins of cheddar cheese. On a personal note, if you live in Oregon, the gorge means the Columbia River Gorge, which is windy, impressive, and indeed quite beautiful. From the available pictures, the Cheddar Gorge seems even more dramatic.


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