The U.S. House of Representatives approved a trade agreement today with the Dominican Republic and five Central American nations (DR-CAFTA), clearing one of the last hurdles to bringing into law a deal that increases access for U.S. dairy exports starting January 2006. Last month, the Senate approved the bill by a vote of 54-45.

DR-CAFTA opens trade between the United States and the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua by providing important benefits to U.S. dairy exports over the short term and completely eliminating any barriers to trade over a 20-year timeframe.

“New access to Central America and the Dominican Republic should result in benefits to the U.S. dairy industry of as much as $100 million in the first years of the agreement,” says Tom Suber, president of the U.S. Dairy Export Council. “U.S. exporters have a great new opportunity to sell whey, cheese, milk powder, lactose and other dairy products to a milkdeficit region of 43 million people with rising dairy consumption.”

“Passage of DR-CAFTA also represents an important trade-policy victory for the administration, providing momentum to the multilateral Doha Round talks of the World Trade Organization,” adds Suber. “Congressional passage of DR-CAFTA signals to U.S. trading partners that the United States is fully committed to opening overseas markets.”

“DR-CAFTA is a clear-cut win for U.S. dairy producers, offering us new opportunities with little downside potential, which we believe can’t be said about all the free trade agreements we have signed,” says Jerry Kozak, president and CEO, National Milk Producers Federation (NMPF). NMPF supports the agreement because it meets the criteria of being
mutually advantageous for the countries involved, Kozak said.

The two associations also extended their appreciation to legislators who supported the agreement in the face of difficult political pressure. In addition, they thanked the offices of the U.S. Trade Representative for their work to negotiate an agreement that will deliver clear benefits to the U.S. dairy industry.

The deal has been approved by legislators in El Salvador, Guatemala and Honduras. Terms go into effect on January 1, 2006, with as many of the DR-CAFTA countries as have ratified it at that point.

NMPF