US dairy groups ask Canada to ‘hold up its end of the bargain’ in trade agreements

31-Jan-2017 - Last updated on 31-Jan-2017 at 09:15 GMT

One concern from US dairy groups is that that Canada will use its program to “dump excess milk powder on global markets.” ©iStock/Hillview1

The US dairy industry is continuing its fight against Canada’s policies, which they say are blocking American dairy imports into the country in violation of international agreements.

In a letter to governors of 25 US states, 17 dairy companies, representing dairy farmers and processors, urged the state leaders to ensure Canadian policymakers uphold existing trade commitments with the US and halt the imminent implementation of a national strategy that they say would unfairly subsidize Canadian dairy products in the Canadian and global markets.

The letter was sent to states with a significant amount of dairy farms and dairy processing companies including Arizona, California, Colorado, Idaho, Iowa, Indiana, Kansas, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, New York, North Dakota, Ohio, Pennsylvania, South Dakota, Texas, Vermont, Virginia, Washington, and Wisconsin.

“Despite Canada’s efforts to distance itself from the administration’s focus on enforcement and improving how NAFTA functions, it is Canada – not Mexico – that has time and again chosen to disregard its dairy trade commitments to the United States and intentionally dismiss serious concerns from the United States about the impact its dairy policies are having on trade,” said Matt McKnight, acting chief operating officer of USDEC.

“Canada should take a page out of Mexico’s book and hold up its end of the bargain to us on dairy trade.”

Canada’s national strategy to expand soon

Beginning February 1, Canada plans to expand the product scope of a provincial program and institute it nationally.

“[US-Canada] trade cannot be a one-way street with Canada expecting to enjoy the benefits of exporting its products of interest to our market while denying a sector accounting for hundreds of thousands of jobs in rural America reliable access to the Canadian market,” the group said in its letter to the governors.

“[An existing provincial] program has already cost US companies tens of millions of dollars in exports, thereby harming the dairy farmers, dairy plant employees and rural communities that depend on the benefits those foreign sales bring.”

A continued effort for change

Heads of US dairy organizations said that they would continue to strive for change until Canada upholds its trade agreements under NAFTA.

Earlier this month, US dairy organizations (IDFA, NMPF, USDEC, and NMPF) and state departments of agriculture sent a similar letter to President Donald Trump that said Canada’s protectionist policies are in direct violation of its trade commitments under the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO). The organizations urged the president and his key cabinet members to take immediate action.

“IDFA will continue to speak out against Canada’s protectionist policies on Capitol Hill, with members of the Trump administration and among state governors and legislators, while asking for changes that will force Canada to honor its trade commitments and allow more access for US dairy products,” Michael Dykes, D.V.M., president and CEO of IDFA, said.

“In the current trade climate across North America, it is foolhardy for Canada to continue provoking the United States with a course of action that so blatantly violates our trade agreements,” Jim Mulhern, president and CEO of NMPF, said.