As the European dairy sector faces geopolitical tensions, evolving trade relations and market volatility, securing successful trade agreements is key to keep supply chains running, especially in these crisis periods, according to European Dairy Association (EDA) president Albert de Groot. “European Union [EU] dairy assets are valued throughout the world, many countries rely on European dairy to support their needs,” he emphasised at the EDA dairy policy conference 2026, which was themed, “Competitive, resilient & sustainable – Our European dairy strategy.”

“A resilient dairy sector will secure our future in an uncertain world,” de Groot, CEO of Vreugdenhil Dairy Foods, a Dutch milk and milk powder producer, told the Brussels meeting. “Thousands of families rely on our dairy products for nutrition and it’s up to us to make the dairy industry an attractive option for investing, operating and partnering with.”

Tariffs and trade deals

Indeed, 2025 and 2026 have been particularly challenging for dairy businesses, with punitive tariffs slapped on the sector not only from the US but also from China and India. However, Catherine Combette, head of unit at the European Commission’s directorate-general for agriculture and rural development (DG AGRI) emphasised how trade was, quite simply, an “obvious” strength of European dairy companies.

“Dairy is one of the main drivers of our agri-exports and we are the world leader in cheese exports,” she said, noting in 2024, dairy products generated €20 billion in EU export receipts, and around eight per cent of total agri-food value overseas sales worth €235.4 billion(1).

“Global demand for EU dairy exports will remain robust and is expected to expand despite a turbulent environment,” she says. “Cheese will remain the main engine; milk powder exports face strong competition from New Zealand and the US.”

The DG AGRI official highlighted the most recent conclusion of an Australia/EU trade agreement, which was agreed in late March(2). This will mean “full liberalisation of tariffs for all EU exports” she said, with Australia eliminating the existing EU cheese import tariff of A$1.22 (€0.74) per kilogram over three years. She noted that the agreement “will be good news for food preparations and ice cream.”

Another EU trading success stressed by Combette was a September 2025 ‘comprehensive economic partnership agreement’ struck with Indonesia(3), one of the world’s main dairy importers and the EU’s fourth biggest outlet making up 30 to 35 per cent of EU exports. The deal will phase out almost all Indonesian tariffs on EU dairy products, currently up to 10 per cent, upon entry into force, expected in 2027. One exception is liquid milk, where Indonesian tariffs will be phased out over five years.

The EU’s next free trade agreement (FTA) likely to be approved is with the Philippines, with a round of talks that began in May. She told delegates, “This is a promising market as a net importer of agri-food products including dairy.”

Meanwhile, the ninth round of negotiations with Thailand, a country seen as a dynamic growth market for dairy ingredients and added value dairy products, are following in June. Talks are at an advanced stage, with decisions remaining on sanitary and phytosanitary measures (SPS).

Trade talks are far less advanced with Malaysia, says Combette. “But we have hope as Malaysia is an important dairy market for ingredients and added products, although we face competition from New Zealand.”

Asia is key

Conference speakers from Asia were also confident of future EU dairy trade health. Winarti Halim, Indonesia’s Brussels-based agricultural attaché, emphasised the importance of substantial investment from international partners including the EU to support the country’s agricultural and food systems. She told the conference that there would be “red carpet treatment” for people who wanted to be more involved.

“We do not want to base trade with one state such as New Zealand. We want to embrace everyone, with Europe always welcome.”

Songkhla Chulakasian, agriculture minister counsellor at Thailand’s Brussels embassy, also noted Thailand’s potential as an attractive partner for the EU’s dairy producers, as well as the country’s interest in diversifying products entering the Thai market.

The private sector benefits greatly from successful trade deals too, Maria Angela Esquivel, Asia corporate affairs director at FrieslandCampina, told Diary Industries International (DII), “Overall, predictable trade relations – in Asia, with China, and with the US – are essential for a global dairy company like FrieslandCampina, which operates long-term, capital intensive supply chains.” She said southeast Asia was a dynamic and pragmatic region for business that is “strongly growth-oriented and open to economic cooperation.”

“The region is becoming increasingly integrated through regional and bilateral arrangements, reshaping the competitive landscape for dairy,” Esquivel told DII after the meeting.

The EU-Indonesia FTA is an important near-term development given Indonesia’s size, growth and importance for dairy consumption, she said further: “Progress toward agreements with Thailand and the Philippines is also significant, with these markets already influenced by regional trade frameworks.”

The greatest impact was on value-added dairy products rather than basic liquid milk, she added. “Trade agreements primarily support products such as milk powders, whey ingredients, cheese and specialised nutrition, where tariffs, regulatory procedures and customs efficiency significantly influence competitiveness and are more sensitive to trade conditions and tariff differentials.”

However, not all trade deals deliver for dairy. While Combette noted the EU’s FTA with India, agreed in January 2026(4), is “the largest ever between the two states… it does not open up the dairy sector in the way agreements with the UK and New Zealand have,” she admitted.

EDA director trade and economics Laurens van Delft agreed, telling DII after the conference that the EU/India deal would deliver limited benefits for core dairy products. “Although some value-added segments may benefit, it remains a missed opportunity for the dairy sector.” He said the most important trade deals in 2025 were with Indonesia and Mexico.

“In parallel, the EU-US ‘Turnberry’ agreement [named after the deal reached between the two parties in July 2025 in Turnberry, Scotland, setting a 15 per cent tariff ceiling (5)] while not a full FTA, provides, once implemented, a degree of market stability for dairy trade, albeit under conditional and reversible terms,” van Delft added, noting that the relationship remained uncertain.

Indeed, following the February US Supreme Court ruling that scrapped the US’s so-called ‘reciprocal’ tariffs, the Trump administration has imposed alternate 10 per cent duties, causing the European Parliament to temporarily suspend ratification procedures for the Turnberry deal (these have now been resumed).

In 2026, the focus of EU trade policy impacting the dairy sector would be a combination of ratification, implementation and advancing ongoing negotiations. Negotiations with Thailand, Malysia, seen as “strategically important given strong import demand despite regulatory constraints,” and the Philippines, particularly relevant for cheese and whey, were progressing, he said. But key issues including market access still needed to be resolved, especially for Thailand, stressed van Delft.

Beyond Asia, along with the additional opportunity trade with Australia, negotiations with the United Arab Emirates (UAE) “also signal growing engagement in strategically important markets,” he continued.

Finally, prospects for comprehensive, full-scale FTAs with especially China, where despite a final ruling in February, of a reduction to 7.4 to 11.7 per cent tariffs on dairy products, the trajectory points towards “continued restrictions and trade friction,” or the US, were limited, he said.

Damien Flynn, a member of the special committee on agriculture at the incoming Irish EU presidency July-December 2026, taking over from Cyprus, said that top priorities in the presidency were making progress on the three key pillars of competitiveness, values and food security. “This is a real opportunity, coming at a time when the global policy environment is extremely challenging given recent events,” he said.

Flynn noted that advancing work on the reforms to the Common Agricultural Policy (CAP) and the EU’s long-term budget for 2028-2034, essential for the dairy industry, was central to the presidency.

He also highlighted that developing an EU livestock strategy(6) was key, especially given its role in sustainable development. Announced in the European Commission’s work programme for 2026, its aim is “fostering the competitiveness, resilience and sustainability of the EU livestock sector and agri-food chain.” The Commission plans to release this strategy by the summer.

Young people and security

Pierre Bascou, DG AGRI deputy director general, emphasised how important the dairy sector was for ensuring Europe’s strategic autonomy and food security, noting that “food security is security.”

A resilient dairy industry needs support from farmers of all ages, and young people are essential for the future of the sector, he continued, with the Commission aiming to make the agricultural sector more attractive. “The Commission wants to add ‘attractiveness’ to the equation, we want to get young people into the sector,” he said.

Marion Picot, secretary general of CEJA (le Conseil Européen des Jeunes Agriculteurs/European Council of Young Farmers) welcomed the news where generational renewal and transferring farms from one generation to another, “has made it to the top of the agenda.” Strong and coordinated commitment from the EU member states, regions and local governments, was most needed, she added.

Picot called for a dedicated minimum national-level budget in the CAP to ensure generational renewal in the sector. And she added that, “if we do not have social resilience in the sector, it will be much harder to have a dairy strategy.”

Notes.

1. agriculture.ec.europa.eu/media/news/eu-agri-food-exports-reach-record-levels-eu2354-billion-2024-2025-04-08_en#:~:text=Continued%20growth%20in%20exports,the%20resilience%20of%20the%20sector.
2. commission.europa.eu/topics/trade/eu-australia-trade-agreement_en
3. policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/indonesia/eu-indonesia-agreements/key-elements-eu-indonesia-trade-agreement-and-investment-protection-agreement_en
4. ec.europa.eu/commission/presscorner/detail/en/ip_26_184
5. www.europarl.europa.eu/news/en/press-room/20260323IPR38830/eu-us-trade-deal-meps-set-conditions-for-lowering-tariffs-on-us-products
6. www.europarl.europa.eu/legislative-train/package-vision-for-agriculture-and-food/file-livestock-strategy