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Dairy groups say Canada's policies harm U.S. economy

Negative impact of Canada’s protectionist policies conservatively estimated at $150 million in lost exports of ultra-filtered milk.

U.S. dairy organizations and state agriculture departments across the country told President-elect Donald Trump that Canada’s existing and soon-to-be-expanded protectionist policies are intentionally designed to block imports from the U.S. These policies are in direct violation of Canada’s trade commitments under the North American Free Trade Act (NAFTA) and the World Trade Organization, the International Dairy Foods Assn., National Milk Producers Federation, National Association of State Departments of Agriculture and U.S. Dairy Export Council said in a letter urging the President-elect and his key Cabinet members to take immediate action.

Their letter to Trump outlined estimates from the U.S. Department of Agriculture showing that every $1 billion of U.S. dairy exports generate more than 20,000 jobs for Americans and almost $3 billion of economic output. U.S. dairy suppliers have reported that they are already losing business because of these programs, demonstrating that Canada’s actions are resulting in lost revenues and jobs for dairy farmers and processors across the U.S.

“This negative impact is conservatively estimated at $150 million worth of ultra-filtered milk exports being lost by companies in Wisconsin and New York, which are highly reliant on their trade with Canada. In fact, the entire U.S. dairy industry is being hurt, as milk prices are being driven down nationally by Canada’s trade actions,” the groups said. “Having an even wider impact on America’s dairy farmers and processors, additional large volumes of skim milk powder will be forced onto the thinly traded global market, resulting in a further depression of prices that will negatively impact the revenues of dairy farmers around the world.”

Flouting trade obligations

The U.S. dairy industry is already restricted by Canada’s exorbitant tariffs, the groups said, and only limited market access is granted under NAFTA. Canada is one of America’s top trading partners, yet the country is clearly flouting its trade obligations by implementing and enforcing these policies, they said.

“The U.S. dairy industry is highly competitive internationally, and overseas markets represent a vital source of future growth opportunities, including thousands of new American jobs,” the groups said. “Not long ago, the United States was a net importer of dairy products, but now, our nation benefits from a dairy trade surplus of over $2 billion. Enforcement of current trade agreements, whether bilateral or multilateral in nature, is central to strengthening the U.S. economy.”

Copied on the letter were several Cabinet nominees, including Robert Lighthizer, the Trump Administration’s nominee for U.S. Trade Representative, along with the leaders and members of the House and Senate agriculture committees.

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