Dairy pays heavy price for Canada to secure North American trade deal
A new North American trade deal agreement has been reached it and will have significant implications for Canadian dairy farmers.
The deal, agreed upon last night, is now called the United States-Mexico-Canada Agreement (USMCA).
The U.S. will be given 3.59 per cent access to the Canadian dairy market.
That’s a significant loss for Canadian dairy, as when the U.S. had signed onto what was then known as the Trans Pacific Partnership, 3.2 per cent access had been given for the entire TPP block, including Australia, New Zealand and the U.S. The U.S. eventually withdrew from TPP, and a new Comprehensive Progressive Trans Pacific Partnership is currently before the Canadian House of Commons for ratification.
Farmtario columnist Kelsey Johnson of iPolitics reports that Class 7 will be eliminated. However, three products that made up most of the volume of Class 7, milk protein concentrate, skim milk powder and infant formula, will be priced on the U.S. price for those products. That will mean that U.S. farmers will be able to compete on price for those products in Canada, but so will Canadian farmers, at the same price.
They had been classed at world price.
Other dairy goods under Class 7 will be price according to their end use.
Peter Clark, a trade lawyer and long-time observer of the said in a Twitter post that in a quick reading of the text, Canada has also agreed to export limits on dairy.
“A quick review of parts of #USMCA text shows dairy sector has paid more than in #TPP,” he said in a Twitter post. “U.S. interference and oversight of special milk classes is an abomination. Effectively extraterritorial application of US law.”
There have also been concessions on poultry, which is also supply managed, but it’s not clear yet what those are yet.
It is unclear that there were any gains for Canada in the deal, only the maintenance of some key provisions on dispute resolution and the guarantee of no tariffs on auto.
Farmtario will continue to update this story during the day.
Source: Farmtario
