US-China partner in an agreement to increase dairy exports

USA – The US Dairy Export Council (USDEC) in collaboration with Jiangnan University have signed a memorandum of understanding (MoU) to enhance growth of US dairy export in China.

The agreement, signed on March 30, opens new opportunities geared at benefiting both the China and US economy.

China presents a large dairy and infant formula market growth potential, projected to grow 44% in the next five years and the agreement builds on a well-established trade relationship between the two world economies.

It also escalates US dairy exports in China which fell in total value and market share in 2015 and 2016 attributed to bureaucratic issues and a stagnant U.S.-China exchange rate, according to USDA report.

The MoU came in the middle of a trade war between US and China, imposing tariffs on basic export commodities including food and agricultural products.

To revive this segment, the two signed another MoU back in June 2017 that facilitated the registration of U.S. dairy facilities as eligible to export to China, a way that could lead to an increase in trade.

China has encouraged U.S. exports of feedstuffs and other intermediate inputs by modernization of its dairy industry.

“China is a top-priority market for the US dairy industry, and we are very excited to be ‘working with one of the best food science schools in the nation,” said USDEC President and Chief Executive Officer Tom Vilsack.

For the deal to stand, the US-China Dairy Innovation Center was established at Jiangnan University with an aim to enhance innovation, technical services and strengthen education and research in the dairy and food sectors.

This forms part of USDEC-led efforts in to build strong trade relations with the US by removing barriers and ensure fair competition.

According to China Ministry of Agriculture’s National Dairy Industry Development Plan for 2016-2020, while three-quarters of all dairy consumed in China will continue to be produced domestically, the remaining demand will be satisfied by imports.

China has established free trade agreements that lower tariffs on their dairy products entering China with major dairy exporters including New Zealand and Australia

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