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US, Other Dairy Groups Ask Chile Not To Apply Safeguards On Gouda, Milk Powder Imports

Dairy industry organizations from around the world this week asked the Chilean government to not proceed with the application of safeguard measures on imports of Gouda cheese and powdered milk.

Earlier this year, according to a report from USDA’s Foreign Agricultural Service (FAS), Chile’s Commission on Markets Distortion (CNDP) published its decision to initiate a safeguard investigation on imports of Gouda cheese and powdered milk that was to determine if the increase of dairy imports, specifically Gouda cheese, whole dry milk and nonfat dry milk, represents a threat to Chile’s domestic dairy sector.

This week, dairy industry associations from the US (International Dairy Foods Association, US Dairy Export Council and National Milk Producers Federation), European Union (European Dairy Association and Eucolait), Argentina (Centro de la Industria Lechera), Australia (Australian Dairy Industry Council), New Zealand (Dairy Companies Association of New Zealand) and Uruguay (Camara de la Industria Lactea del Uruguay) submitted comments to the safeguard investigation.

The industry associations said they appreciated the government of Chile’s earlier decision not to proceed with provisional safeguard measures on the products subject to investigation. Their comments relate to the ongoing investigation into definitive safeguards, and the requirements under the WTO Agreement on Safeguards.

Under that WTO agreement, a measure may only be applied where there is (1) a surge in imports; and (2) this surge results in or threatens to cause serious injury to the domestic industry that produces like or directly competitive products, the dairy groups noted.

The CNDP, according to the WTO notification, has determined with the information available that the serious injury sustained by the domestic industry had been caused by a sharp drop in import prices and by the dramatic increase in imports in recent years, which had led to a loss of sales volume and market share for domestic production.

“There has been no decrease in import prices,” the dairy groups noted. “On the contrary, the US dollar price of imported Gouda and whole milk powder, both from the major supply sources and averaged across all origins, was up significantly in 2017 compared to 2016. The US dollar price of SMP from all origins was also higher in 2017 than in 2016.”

The increase in imports of Gouda cheese and powdered milk in 2017, compared to realtive levels in 2016, was “largely due to the increase in local consumption which has resulted in a structural deficit for dairy,” the dairy groups said.

Consumption surpassed production in 2015, with the gap widening to a level where
...

 

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