New US-Mexico Dairy Alliance 're-energizes' commitment to NAFTA agreement

By Mary Ellen Shoup

- Last updated on GMT

The new alliance between the US and Mexico aims to boost dairy production and consumption, and break down trade barriers. Pic: ©iStock
The new alliance between the US and Mexico aims to boost dairy production and consumption, and break down trade barriers. Pic: ©iStock

Related tags Dairy Dairy products Milk International trade

Leaders of U.S. and Mexican dairy industry organizations have signed a US–Mexico Dairy Alliance pledging to work together to boost trade between the two countries.

The memorandum addresses mutual challenges and goals, such as increasing dairy consumption, while also promoting milk production on both sides of the border. Dairy leaders from the US and Mexico will meet annually to exchange information, review industry trends, and identify and seek solutions for problems affecting either side, as specified by the newly-signed agreement.

Signing the memorandum for the US were Tom Suber, president of the U.S. Dairy Export Counci (USDEC), and Jim Mulhern, president and CEO of the National Milk Producers Federation (NMPF). Salvador Álvarez Morán, president of the Mexico Livestock Association (CNOG) and Juan Carlos Pardo, president of the National Chamber of Industrial Milk (CANILEC) signed on behalf of the dairy industry of Mexico.

Accommodating growing dairy markets

Mulhern and Suber characterized the summit as re-energizing a relationship forged under the North American Free Trade Agreement (NAFTA), which came into force in 1994. Mulhern described NAFTA as an example of a trade agreement that substantially benefits both countries.

Since NAFTA was formed in 1994, Mexico has become the leading US export market for some dairy products, mainly nonfat dry milk and cheese. US dairy exports to Mexico have also surged from $182m in 1994 to $1.3bn in 2015. US dairy imports from Mexico have seen substantial increase as well, growing from $3m in 1994 to roughly $114m in 2015.

“Since NAFTA, our markets have converged, seeing both U.S. and Mexican dairy farmers growing. U.S. dairy exports to Mexico have increased significantly, while Mexico’s internal milk production has also seen expansion,”​ Suber said.

Mutual interests

The memorandum also includes a plan to reduce trade barriers between the two countries going forward and defend against efforts to capture cheese names like parmesan, asiago, and feta for the exclusive use of some European producers.

For instance, the EU is seeking to expand regulations on geographical identifications on dairy products such as Parmigiano Reggiano cheese by the limiting the use of the “parmesan” on cheese products not made in the Parma region of Italy.

“At the same time,”​ added Suber, “volatile markets, increased imports from third countries and consumer misinformation about dairy products pose challenges for the dairy industries in both countries that can be best solved through both industries working together.”

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