Canada increasingly under fire for new dairy policiesCanada increasingly under fire for new dairy policies
Dairy groups across globe urge trade officials to challenge new protectionist dairy policy.
September 12, 2016
Dairy organizations in the U.S., Australia, the European Union, Mexico and New Zealand issued a joint letter to their respective trade and agriculture officials expressing indignation about Canada’s recent actions to deepen its already prohibitive restrictions on dairy trade.
The groups said Canada’s increasingly protectionist policies violate “international trade obligations, hold out the prospect of trade diversion with attendant global price-depressing impacts and are in conflict with the principles of free markets and fair and transparent trade.”
The U.S. groups, including the National Milk Producers Federation (NMPF), the U.S. Dairy Export Council and the International Dairy Foods Assn. (IDFA), oppose a Canadian Agreement in Principle recently concluded between Canada’s dairy producers and processors. The agreement, which is undergoing finalization and review in Canada, would provide an incentive to substitute Canadian dairy ingredients for imported dairy ingredients and would unfairly subsidize exports of Canadian dairy products. If ratified, the agreement would take effect Nov. 1, 2016.
In addition to the three U.S. organizations, the other dairy groups on the letter are the Australian Dairy Industry Council, the European Dairy Assn., the European Whey Products Assn., the European Assn. of Dairy Trade, Mexico National Chamber of Industrial Milk and the Dairy Companies Assn. of New Zealand. Each of the dairy organizations asked officials in their respective countries to initiate a World Trade Organization dispute settlement proceeding to challenge the agreement once its details are announced.
In the letter sent jointly to U.S. Trade Representative Michael Froman and the other government trade officials, the dairy organizations stated that the Agreement in Principle would breach Canada’s trade obligations under WTO and the North American Free Trade Agreement. They said it also would undermine the intent of the pending Trans-Pacific Partnership (TPP) and the EU-Canada Comprehensive Economic & Trade Agreement.
“Canada’s continued disregard for the provisions in its pacts with trade partners is unacceptable. These protectionist policies are in direct conflict with the principles of free markets and fair trade, which trade agreements like TPP aim to promote,” said Connie Tipton, president and chief executive officer of IDFA.
“The dairy trade situation with Canada has gone from bad to worse this year, and now Canada is contemplating doubling down on that terrible track record,” Jim Mulhern, president and CEO of NMPF, added. “Enough is enough; Canada needs to stop shirking its dairy commitments and hold up its end of already negotiated agreements.”
“For years U.S. exporters have borne the brunt of a continuing procession of new Canadian policy tools intended to curtail dairy imports,” said Tom Suber, president of the U.S. Dairy Export Council. “TPP has included new features to move toward more open trade by expanding market access compared to the status quo, but Canada has been doing its best to erode long-standing existing access as much as possible before this agreement is even put in place.”
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