In testimony Wednesday before a governmental trade policy panel, the head of the National Milk Producers Federation said his organization opposes a Free Trade Agreement with Australia because America’s dairy farmers "risk losing their livelihoods because of this ill-advised FTA with Australia."

Jerry Kozak, NMPF president and CEO, said his organization "must draw a line in the sand against the Australian FTA, and any effort to eliminate dairy tariffs. It is a line we will not cross, because it doesn’t improve an unfair trade environment for U.S. dairy farmers and consumers."

Last November, U.S. Trade Representative Robert Zoellick announced that the Bush Administration planned to negotiate a free trade pact with Australia in 2003, with the goal of having it approved by Congress next year. The USTR’s Trade Policy Staff Committee invited Kozak to testify on the proposed FTA today as part of its consideration of the issues surrounding the elimination of all tariffs in trade with Australia.

Kozak told the panel that the FTA "represents the wrong solution to the right problem." America’s dairy farmers are faced with global export markets that are distorted by a variety of economic policies, such as production and export subsidies, currency devaluation programs, and monopolistic import and export boards, but offering free trade to Australia will not help improve the situation.

"The world marketplace, and the world price for dairy products, is not just uneven – it’s strewn with rocks, holes, pitfalls and puddles," Kozak said, adding that Australia’s dairy farmers are also adversely affected by the distortions in the world dairy marketplace. "The solution to these problems is the comprehensive elimination of many of these practices that contribute to an artificially low world price for milk," he said.

Kozak argued that the proposed Australian FTA does nothing to address these disparities. "In fact, the successful inclusion of dairy tariffs in this FTA will actually make matters worse for U.S. producers," Kozak said. That’s because if Australia gains complete access to U.S. markets, it will have much less motivation to push for a successful World Trade Organization round of trade talks that will help eliminate the global disparities in dairy trade. Only through a comprehensive global trade negotiation involving Europe, Japan, and other developed and developing nations will the U.S. and Australia both benefit from an improved world market for dairy product sales.

Kozak reminded the USTR panel that even though some see the Australia FTA as vital to national security, the U.S. dairy producer community feels that "this FTA will negatively impact our food security – and thus, also our national security. No homeland can be secure if the quantity and quality of its dairy supply is in doubt." Kozak pointed to remarks that President Bush made a year ago while speaking to a group of America’s cattle producers that "it is in our national security interests that we be able to feed ourselves."

Kozak said that "security, quality and reliability" of our food supply is in jeopardy because of the proposed FTA, and thus, NMPF and its members will oppose the inclusion of dairy tariffs in the agreement as it is negotiated.

National Milk Producers Federation