March 17, 2018

Canadian envoy downplaying talk of potential trade rift with the US

21 April 2017, 02:43 | Taylor George

After Trump's attack, Canada's ambassador to the USA sent a letter to the governors of Wisconsin and NY saying Canada' dairy policy is not the cause of financial losses for us dairy farmers.

Canada's ambassador to Washington David MacNaughton said the overproduction of dairy is causing the losses, not changes in policy in Canada.

The governors of Wisconsin and NY are urging President Donald Trump to address what they are calling Canada's "blatant violation of worldwide trade agreements" hurting dairy farmers in the two states.

It was unclear exactly what Trump was referring to with that comment - whether it was Canada's supply management system, its decision to impose import taxes on ultra-filtered milk, or something else entirely. He threatened to tear up the North American Free Trade Agreement (NAFTA) unless there were substantial changes to what he called a "very unfair" system and he called trade rules between Canada and the USA a "complete and total disaster" for the U.S. - April 13 letter to U.S. President Donald Trump from the National Milk Producers Federation, the U.S. Dairy Export Council, the International Dairy Foods Association and the National Association of State Departments of Agriculture.

His remarks follow sharp criticism from U.S. President Donald Trump over Canada's supply-managed dairy industry, suggesting the rules are stacked in Canada's favour.

Despite Trump's promises to find a "solution" to the dispute, Stephenson said dairy farmers aren't holding their breath.

Herman said that raises the likelihood that supply management will be on the table in future trade negotiations during which the USA will try to win an increase for its dairy imports into Canada.

The report said dairy exporters in several other countries, including Mexico, The European Union, Australia and New Zealand, have also decried Canada's dairy-pricing practices as being protectionist.

But Canadian agriculture leaders say they have a right to enact domestic-minded policies, especially as US farmers flood worldwide markets with excess milk.

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"We feel obligated to help wherever we can", said Vice President Bill Mullins. The affected farmers lost contracts with USA dairy processors that export to Canada.

"We're also going to stand up for our dairy farmers in Wisconsin", he said.

"A WTO complaint would be a last resort because it would take five or six years to come to any resolution", said Jaime Castaneda, senior vice president for the U.S. Dairy Export Council.

"We're going to get together and we're going to call Canada, and we're going to say, 'What happened?' And they might give us an answer, but we're going to get the solution, not just the answer, OK?"

Gov. Andrew M. Cuomo is once again targeting Canadian dairy pricing programs that he and other lawmakers say hurt dairy farmers in NY. Most of their dairy exports are subject to duties between 200 and 300 per cent, even though the trade agreement eliminated virtually all other agricultural tariffs.

"Americans are starting to realize more and more that Canada is pretty important to jobs in the USA", he said.

Trudeau signalled that he is optimistic he can persuade Trump, saying the USA president is "unlike many politicians" and avoids the instinct to "stick with" a particular position.

Trump vowed to move "very, very quickly" on negotiations with Canada, saying he would have a more detailed plan in coming weeks.

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