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The Upstate Economy

TPP not likely to lead to huge change in dairy Industry, says expert

Matt Richmond
WSKG News File Photo

The Trans-Pacific Partnership, or TPP, will certainly affect dairy farmers in New York state. But will it affect consumers? Of the 11 other Pacific Rim nations in the agreement, Canada, New Zealand and Australia have robust dairy industries that want to export more products to the U.S.

The Canadian provinces of Ontario and Quebec produce roughly the same amount of milk as New York state. That estimate comes from Andrew Novakovic, who teaches agricultural economics at Cornell University. Canada could “theoretically, hypothetically [have] some ability to undercut our beverage milk sales from local sources in the U.S. if certain conditions were just right for them,” he said.

But Novakovic isn’t fearful that we’ll see much milk coming from our northern neighbor.

“My great expectation is that this agreement will not create a new opportunity for them,” he said.

Still, Novakovic wants to read the actual language of the accord when the text is released in November. Australia and New Zealand dairy producers could benefit too, especially from powdered milk products that can travel long distances.

Novakovic says that the TPP will likely build on the agreements these countries have from other trade treaties.

"My guess is that New Zealand, Australia and Canada will have some preferential access within our already-existing WTO agreement and then phase-in even greater levels of access over time."

Novakovic says it all depends on price, and the U.S. has made a definitive calculation that there’s more to be gained than lost with the TPP.