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Dairy products

Main policy areas


Tariff quota administration

  • TRQs are applied in several important markets, including the EU, United States, Canada and Japan;
  • A major element of TRQ access for dairy products is country specific. For example, the TRQ for butter imports to the EU is allocated to New Zealand;
  • Fill-rates for dairy TRQ’s (1995-99) averaged 65 percent.


  • Tariffs in a number of developed countries in Western Europe, North America and Japan - are set a very high levels, often in excess of 100 percent;
  • Developing country tariffs are general low, or zero, exceptions are the Republic of Korea and China.

Market access

  • As there was no uniform methodology for calculating minimum access for dairy products (in terms of product definitions), access to some important markets is less than 5 percent;
  • Some exporting countries have stressed the need to have a standardised methodology for calculating minimum excess for dairy products in any future round of negotiations.

Amber box

  • Domestic support to dairy producers in North America, Western Europe and Japan is viewed by low cost exporting countries as limiting access to these markets and, in the first two instances, producing a surplus which must rely on the use of subsidies in order to be exported;
  • As an indication of the level of support given to dairy in many developed countries, average PSE’s for the sector amongst OECD members are in the region of 55 percent;
  • Domestic support provided in most developing countries, New Zealand, Australia and eastern Europe is either low or no-existent.

Export subsidies

  • The right to use export subsidies is mainly limited to countries in Western Europe and North America. Historically, high internal prices for milk have meant that such countries have had to reply on subsidies to export dairy products;
  • Subsidised sales account for approximately 30 percent of world dairy trade;
  • Canada has sought to develop a differential internal pricing system to allow domestic milk for processing into export products to be purchased by processors at world market prices (this system is the subject of a WTO dispute panel);
  • During the Uruguay Round implementation period, both the United Sates and the European Union made use of roll-over provisions, whereby unused volumes of subsidised exports were carried over from one year to the next;
  • Concerns that export subsidy limits might result in a substantial increase in food-aid have proved unfounded.

Export credits

  • Not important, as high-cost producing countries rely on exports subsidies (see above)

State trading enterprises

  • Since the 1980’s, importing STE's have become progressively less important;
  • In New Zealand, the export industry has been reorganised and the Marketing Board is no-longer a monopoly exporter of certain dairy products.

Export restrictions and prohibitions

  • Almost non-existent - India has set some maximum limits on exports.

Food security

  • This issue is not frequently raised for dairy.

Food safety

  • At the national level, this is a very important and highly regulated issue - within the WTO it has not been important, so far.

Rural development

  • Increasing farm income, including dairy development, is an important issue in many developing countries;
  • Multi-functionality, including the role of dairy, important in some OECD countries.

Green box

  • This is not an important issue as research and other services to the dairy industry are not production or trade distorting.

Blue box

  • Not applicable to dairy, as EU support mechanisms to sector are not based on direct aid payments; rather, on a production quota system supported by subsidised storage, processing incentives and export subsidies.

Geographical indications

  • Important - especially for European cheese.

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