K.C.
For now, don't make him order his own food. Even though he isn't shy and it seems like an easy thing to do, it might make him nervous. There might be better situations where he could practice the skills. Even being on a play date with a friend and responding to questions asked by the other parent is great practice.
When asking him about the drink, don't ask from across the room. Sit right next to him, look him in the face, and say "milk or water?" If he doesn't answer immediately, say "I'm counting to 10. If you don't answer by 10, you're getting milk." (or water, whichever you choose at that time).
It sounds more like he's having a hard time choosing, even though it seems like such a simple decision to make. I remember my son going through something similar about a year ago, where he would start crying over truly simple decisions because he just got overwhelmed (he was 4 then, he's in kindergarten now). It was just a phase and he got over it. I remember his teacher telling me it was because he was just so worried that if he chose one, he'd really regret not choosing the other, so it made it hard for him to choose anything.
Ask the teacher for some ideas, too. It can't be the first time she's seen this.
Maybe try telling him that, if you choose A this time, you can have B next time. That way, he won't feel like he's missing out.