New Zealand dairy exporters could get better access to the hard-to-penetrate US market thanks to a new development in Congress.
A bi-partisan bill has been introduced to permanently remove tariffs on imports of infant formula from overseas.
This bill is the latest response to last year's supply crisis that left thousands of American mothers scrambling to get infant formula from wherever they could find it.
Infant formula is seen as an essential supplement for women who have difficulty with lactation or have an adopted or foster baby.
The collapse of the infant formula market in the US led to a temporary suspension of import tariffs to augment a Federal programme of flying in emergency supplies from abroad.
Four politicians have now introduced legislation to end tariffs permanently.
They are Senator Mike Lee, Republican, from Utah, Senator Bob Menendez, Democrat from New Jersey, Congressman Adrian Smith, Republican from Nebraska and Congressman Don Beyer, Democrat from Virginia.
In a statement, Senator Menendez says he is proud to be jointly leading a bi-partisan effort to protect children from future risks.
“We have a responsibility to care for our families and children and this common sense solution will do just that.”
The legislation is opposed by a powerful American lobby group, the National Milk Producers Federation.
Here in New Zealand the legislation is supported by the representative group, Dairy Companies Association of New Zealand (DCANZ).
“We believe the Bill would build and support the resilience of US Infant formula supply chains by providing American parents more options in the market,” says its executive director, Kimberly Crewther.
“Import barriers for infant formula have served US families very poorly. Rather than supporting food security they made the US more vulnerable to supply disruption.”
New Zealand exported $1.7 billion of infant formula in 2022, mainly to China. In addition, it sold ingredients for formula manufacturing in other countries. But it faces difficulties in China due to a falling birthrate.
Sales to the US currently attract a 17.5% tariff.
The American crisis was widely blamed on supply chain problems dating back to the Covid era, which were exacerbated by a large-scale product recall and strict regulations which discourage production.
Some of those regulations are connected with the Special Supplemental Nutrition Programme, which is the current name for the Food Stamps scheme for low income families.
DCANZ sees the high level of regulation of infant formula as an “own goal” by the US Government.
3 Comments
No, it won't make it any easier to crack the US markets because tariffs are not the problem, its getting approval by the FDA to be able to sell IF which is regulated like a drug and not a food product. Those that got approval for Operation Fly Formula are now able to go through a special regulatory process for permanent approval, anyone else still has to go through the whole process. Secondly, Australian IF producers already supply IF to the US tariff free, courtesy of their Free Trade Agreement, which is one reason why Aussie IF manufacturers were given preference under OFF (that, and the fact that Australia has close military ties with the US while NZ is a useless hanger on only when it suits us). NZ does not have an FTA with the US, so its unlikely that the US Govt will start shafting their FTA partners by handing out freebies to competitors.
Exactly right K.W. re the close military ties with the US as key. NZ's boat sailed with the Americans after we shafted them with our anti-nuclear stance and wouldn't let in one of their obsolete / non-nuclear destroyers. The US has not forgotten that snub against a superpower and Australia has wisely stayed on-side with the US. Until ANZUS is restored, as it will be out of necessity to pick a side against China and for NZ's survival alongside Australia in a war, NZ will remain "out in the cold" with trade preferences to the US.
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