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Dairy Standards and TTIP
Joe Glauber
International Food Policy Research Institute
Economic significance of standards
Rise of quality standards
• Safety concerns
• Environmental concerns
• Nutritional concerns
• Health concerns
• Social concerns
• Some potentially exclusionary (Gis)
Dairy industry in 2016European Union USA
Number of milk cows (mil) 23.6 9.3
Milk production (mil t) 151.6 96.3
Fluid milk consumption (mil t) 34.0 26.5
Manufacturing use (mil t) 121.2 69.3
Butter production (mil t) 2.380 0.850
Cheese production (mil t) 9.790 5.475
WMP production (mil t) 0.720 0.040
NFMP production (mil t) 1.800 1.045
Cheese exports
0
100
200
300
400
500
600
700
800
900
2012 2013 2014 2015 2016
EU US
Thous tonnes
US dairy imports from the EU
0
500
1.000
1.500
2.000
2011 2012 2013 2014 2015
Cheese Casein and Mixtures Other Dairy Products
Butter and Butterfat Mix Milk and Cream, Fr/Dried
Mil USD
US exports to the EU
0
50.000
100.000
150.000
200.000
2011 2012 2013 2014 2015
Other Dairy Prods Whey, Fluid/Dried Cheese
Nonfat Dry Milk Evap/Condensed Milk Butter & Milkfat
Mil USD
Impacts of TTIP on bilateral dairy trade
StudyBaseyear
ProductEU to US US to EU
base increase base Increase
Bureau et al. 2014
2025 Total dairy
$1.009 bil +$2.407 bil(83% NTBs)
$0.258 bil +$5.386 bil(73% NTBs)
Beckman et al. 2015
2011 Whey $1.6 mil +$0.1 mil $7.8 mil +$34.0 mil
Powder $6.0 mil +$0.3 mil $2.4 mil $21.8 mil
Cheese $1.068 bil +325.3 mil $7.7 mil +$76.3 mil
Butter $34.1 mil +$4.0 mil $73.2 mil +$150.8 mil
Issues
• Use of rBGH
• Somatic Cell Count
• Pasteurized Milk Ordinance (PMO)
• Food Safety Modernization Act
• Geographical Indications– Parmesan, Gorgonzola, Asiago, Feta,…
Source: Babcock (2015)
Conclusions
• Tariff issues likely less of an issue
• Potential gains to both EU and US are large in dairy sector
• Resolving nontariff issues regarding standards, etc will be far greater challenge
