Canada hits back in dairy dispute with the US

Cheryl Sanders
April 27, 2017

"Canada does not accept the contention that Canada's dairy policies are the cause of financial loss for dairy farmers in the United States", Canada's envoy to Washington, David MacNaughton, said in a letter to the governors of NY and Wisconsin.

The Sask. dairy industry is sour over comments made by U.S. President Donald Trump on the North American Free Trade Agreement.

"We're also going to stand up for our dairy farmers", Mr. Trump said.

"I wasn't going to do this", Trump said.

Trade groups for USA dairy farmers have complained that a policy rolled out in Canada recently violates the trade agreement by creating incentives for Canadian processors to use local supplies.

"What the saying is "Oh, you should be giving us access" - at the same time as (it's) saying 'Oh, we want to not give other people access in other markets, '" he said.

He said both he and Ottawa would continue to speak out for Canadian interests when necessary, and expects USA politicians to do the same.

Trudeau said the system, known as supply management, "works very well" in Canada.

That prompted the Canadian ambassador to the United States, David McNaughton, to respond in a letter to the two governors this week.

Trump said he wouldn't allow the situation to continue and brought up a separate conflict with Canada over timber.

Those exports increased from US$33m (£25m) in 2011 to US$98m (£76m) in 2016.

"Simply put, the USA, and for that matter, for the last of years, right around the world, there has been too much milk produced", he said."This oversupply in the especially a challenge where there is a lack of processing capacity".

How much leverage does Canada have in renegotiating a trade deal with the U.S.?

Trump was amplifying the complaints of Wisconsin and NY governors, who say Canada's decision to create a new lower-priced, classification of milk product has frozen US producers out of the Canadian market. "And we'll be reporting back some time over the next two weeks as to NAFTA and what we are going to do about it", Trump said. New Zealand Trade Minister Todd McClay told Reuters in an email his government was assessing the "WTO-consistency" of Canada's dairy industry policy, and had raised concern with the Canadian government.

Bernier calls supply management a cartel, a phrase his competitor Erin O'Toole says turns farming families into nothing more than political props.

Despite the strong words, MacNaughton is downplaying any talk of growing trade irritants with the United States.

"(Trump) has shown that if he says one thing and then hears good counter-arguments, or good reasons why he should shift his position, he will take a different position ...

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