In an effort to stem the surge of imported dairy proteins that are circumventing U.S. trade laws, the National Milk Producers Federation filed a formal challenge to how the U.S. Customs Service classifies dairy products such as milk protein concentrate (MPC).
The legal action initiated Wednesday is designed in part to shed light on the fact that a significant portion of U.S. imports of MPC are not truly concentrated milk proteins, but are actually blends of other dairy products such as skim milk powder, whey powder, and casein. The blends are intended to take unfair advantage of U.S. trade policies that allow the unrestricted entry of MPC, but not the individual components found in the blended products, into the United States.
“The U.S. Customs Service is the gatekeeper for these imported dairy products, but they’ve been asleep at the switch on this issue for too long,” said Jerry Kozak, President and CEO of NMPF. “The action we’re taking today should serve notice that while Customs has been turning a blind eye to misclassified dairy imports, U.S. dairy farmers will not.” Kozak said America’s dairy farmers have been economically disadvantaged by imports of blended proteins mislabeled as MPC, which have surged six-fold since the mid-1990s.
The NMPF action initiates a legal challenge under Section 516 of U.S. tariff law, which allows interested parties to challenge the tariff classification of imported items. The Section 516 petition asks the U.S. Customs service to report on whether imported dairy products such as MPC are properly classified according to tariff regulations.
“This issue turns on the fact that because imports of Milk Protein Concentrate do not pay significant tariffs compared to other dairy products such as skim milk powder and whey, exporters are exploiting that loophole by reblending milk powder, labeling it ‘MPC,’ and avoiding U.S. tariffs,” Kozak said. “That’s bad enough, but the fact that the U.S. government is allowing this practice to continue is truly shameful.”
Last year, NMPF asked the Customs Service to investigate the mislabeling and misclassification of imported MPC. After an initial decision last October which found that many of the imported dairy proteins were in fact misclassified as MPC, senior U.S. Customs officials subsequently reversed their decision and upheld the status quo. According to NMPF, the Customs Service’s equivocation on the issue will only embolden foreign exporters of milk proteins to further exploit lax U.S. enforcement of our tariff regime.
“Our trade laws clearly state that true milk protein concentrate is a product from which the water is removed, leaving the protein levels the same as they would be in raw milk. MPC is not the same as a pinch of skim milk powder and a dash of whey or casein, blended together and labeled ‘MPC.’ Our government needs to be more diligent in not accepting at face value importers’ claims about the nature of these products. Otherwise, America’s farmers will have little faith in our government’s ability to police other surreptitious and patently unfair trade practices,” Kozak said.