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International
dairy trade absorbs only about 5 percent of the cow's
milk produced globally. The trade is primarily in major
manufactured dairy products—butter, cheese, and dry
milk powders—with some trade in fluid milk products,
ice cream, yogurt, and dry whey products. The United States
has not been a major sustained exporter of dairy products.
There have been sporadic unsubsidized exports of butter
and nonfat dry milk powder, but more often some subsidy
has been required. The United States is an important importer
of relatively large (although mostly fixed) amounts of cheese.
Until the conclusion of the Uruguay Round of the General Agreement
on Tariffs and Trade (GATT), the United States employed rigid dairy
product import quotas to shield our milk price support program from
the international dairy market. As a member of the World
Trade Organization, the United States moved to so-called tariff
rate quotas (TRQs) for dairy products. The TRQs allow imports at
very low tariffs up to fixed amounts. Any additional imports are
subject to very high tariffs. Many of the individual TRQs are administered
through licenses for imports of specific products from specific
countries or regions.
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