Trade rep may bring dairy into discussion

WASHINGTON — An emerging trade deal with New Zealand and other Pacific and Asian countries could finally give the United States a chance to put new limits on imports of dairy proteins, U.S. Trade Representative Ron Kirk told members of Congress Wednesday.

At a Capitol briefing on dairy implications of the Trans-Pacific Partnership, Mr. Kirk acknowleged lawmakers' complaints about imports of milk protein concentrate and cast the talks as one way to impose tariff-rate quotas that would limit how much enters the United States — although he said he is ruling dairy products neither in nor out as a matter of discussion.

If dairy products are part of the talks, Mr. Kirk said, "it's a great way to rationalize things," such as a loophole in trade laws that puts no limits on MPC imports. Milk protein concentrates are a mostly imported ingredient used in cheese and other foods, used instead of milk produced on U.S. farms.

"Everything would have to be on the table, in the spirit of making everything fair," Mr. Kirk said in response to questions from Rep. Peter Welch, D-Vt., who hosted the meeting.

The prospect of a trans-Pacific trade agreement including New Zealand has alarmed dairy farmer groups and lawmakers from such milk-producing regions as Northern New York. Dairy products are New Zealand's top export, thanks to that country's low production costs, and officials there have made clear their interest in the U.S. market.

Dairy-farmer groups in the United States say a free-trade deal with New Zealand would probably open U.S. markets to more imports while offering little access in return.

The House Dairy Caucus, which met with Mr. Kirk, is composed of lawmakers who are largely pushing for dairy to be left out of the talks. Mr. Kirk gave little indication that the Obama administration wants to move in that direction, however.

Although he acknowledged that dairy farmers face tight margins, he told lawmakers he has "pushed back a little" on farmers who want dairy carved out of any trade agreement. Rather than take dairy products off the table, he said, he has asked of farm groups, "How can they make this work?"

Rep. Roscoe G. Bartlett, R-Md., corrected Mr. Kirk, saying farmers are losing money, not facing tight profit margins.

Mr. Bartlett, a former dairy farmer, said farmers are making about twice as much per 100 pounds of milk as when he farmed in the 1960s, but face costs five or six times greater to produce it.

"They're farming away the inheritance for their kids," Mr. Bartlett said.

Rep. William L. Owens, D-Plattsburgh, missed the meeting during a series of House votes but said later that he does not want a trade agreement that negatively affects dairy farmers. And he voiced skepticism that a deal could be reached that works to farmers' benefit.

"I don't see it, but I don't want to say that can't happen," Mr. Owens said.