“Outstanding”’ is the term President Donald Trump used several times in describing the trading relationship with Canada after meeting with Canadian Prime Minister Justin Trudeau. However, for those in the dairy industry, Canadian’s protectionist milk pricing policies need to be addressed as the new Administration begins renewed trade discussions with Canada.
Ahead of Trump’s meeting with Trudeau, the National Milk Producers Federation (NMPF), the U.S. Dairy Export Council, the International Dairy Foods Assn. (IDFA) and the National Association of State Departments of Agriculture are calling Canada’s protectionist milk pricing policy “one of the most sensitive and urgent topics complicating the relationship between the two countries.”
The pricing scheme, already implemented in Ontario last year and slated to be used by Canada’s other provinces this year, is expressly intended to slash milk imports from the U.S. The policy will also enable Canada to sell dairy ingredients below cost in international markets, in effect dumping the product at below cost in competition with U.S. dairy exports. The Ontario program has already cost U.S. companies $150 million in exports, thereby harming the American dairy farmers, dairy plant employees and rural communities that depend on the benefits of those foreign sales.
Implementation of this pricing measure “comes at a time when compliance with the letter and spirit of trade agreements is of paramount importance both here in Washington (D.C.) and around the world,” NMPF president and chief executive officer Jim Mulhern said. “Despite this, Canada still wants to move ahead with a policy that clearly violates its trade agreements with our country. We hope President Trump will remind Prime Minister Trudeau how important it is that Canada honor its commitments.”
Dr. Michael Dykes, president and CEO of IDFA, noted: “Canada’s intentional and continued flouting of its trade obligations effectively blocks imports of U.S. ultra-filtered milk. What’s more, existing Canadian tariffs that range from 200% to more than 300% on other U.S. dairy products are unacceptable. Exports are vitally important to the health of the U.S. economy, especially in the rural heartland of our country, and we urge President Trump to stress the importance of market access for U.S. dairy products during his meeting with Prime Minister Trudeau.”
Speaker of the House Paul Ryan (R., Wis.) raised the issue of dairy policies in both his meetings with Trudeau as well as in discussions with Canadian Foreign Minister Chrystia Freeland. “We had a productive discussion focused on ways to deepen ties between the U.S. and Canada with respect to trade and national security,” Ryan said following the meeting with Trudeau. “I also re-emphasized the importance of breaking down trade barriers and improving market access for America’s dairy farmers. We look forward to continue strengthening the U.S.-Canada relationship.”
Tweaks to trade with Canada ‘less severe’
In a press conference alongside Trump, Trudeau noted that 35 U.S. states list Canada as their largest export market. “Our economies benefit from the over $2 billion in two-way trade that takes place every single day,” he said.
Trump added that the two will be making some cross-border adjustments that will make trade a lot easier, better and faster.
“We have a very outstanding trade relationship with Canada. We’ll be tweaking it. We’ll be doing certain things that are going to benefit both of our countries," Trump said. "It’s a much less severe situation than what’s taking place on the southern border. On the southern border, for many, many years, the transaction was not fair to the United States. It was an extremely unfair transaction. We’re going to work with Mexico ... to make it a fair deal for both parties. I think that we’re going to get along very well with Mexico; they understand, and we understand.”