Dairy farmers group say they're paying the price to seal trade deal

Sean Reid
October 5, 2018

During the protracted negotiations to finalize the deal, U.S. President Donald Trump had often criticized the 300-per-cent tariffs U.S. dairy farmers pay to export to Canada, and he threatened tariffs against Canadian-made vehicles exported to the U.S.

Although the USMCA avoids tariffs, it will make it harder for global auto makers to build cars cheaply in Mexico and is aimed at bringing more jobs into the United States.

Speaking to the Greater Vancouver Board of Trade (GVBOT) Tuesday, Morneau says the United States-Mexico-Canada Agreement (USMCA) offers stability and confidence to Canadian businesses, but was unable to provide estimates on how much it will impact the country's economy.

"Today we have kept that promise", Trump said.

The agreement will consolidate the North American region "as one of the most competitive in the world", according to the Mexican president on Twitter. "Canada recently made concessions in the Trans-Pacific Partnership and a trade deal with the European Union that also opened up its dairy market". Starting in 2020, USMCA will force auto manufacturers in North America to build vehicles with at least 75 per cent of their parts coming from within the continent to qualify for zero tariffs.

Maritime dairy farmers are expressing disappointment in the new deal Ottawa reached with the US and Mexico and they say this isn't the first time they've taken a big hit.

"Without tariffs, we wouldn't be talking about a deal", Trump said. He covers USA politics and current affairs. "There are really no poison pills in here for Democrats".

"We need to produce milk with no anti-biotics", said Nick Bokma.

Kudlow said that the USMCA - in addition to new trade talks with the European Union and Japan - gives the US a stronger hand to play in looming trade negotiations with China.

In the new deal, Canada agrees to give a greater market share to USA dairy farmers. Given the vast economic ties between America and China, policymakers in Washington had understandably been wary of imposing sanctions on Beijing.

"It's a great win for the president and a validation for his strategy in the area of worldwide trade", a senior administration official told reporters.

In fact, the US has always been a manufacturing powerhouse and by some projections - before the current deal - expected to be No. 1 in 2020.

The USMCA breaks down those rules a little bit, giving new quotas for American dairy exports to Canada.

"This deadline was real", according to a senior USA official. If the three countries concur on whether the deal is still effective, it will be finalised on for the full 16 year-period.

Mexico is exempt as long as its manufacturing growth doesn't exceed USA production, while Canada's applies to far more cars than the country produces.

"The government has said repeatedly that it values a strong and vibrant dairy sector".

However, she says the tariffs imposed by the United States on Canadian steel are "unjustified".

In a statement, Canacero said it supported efforts to find a solution to the impasse before the leaders of Mexico, the United States and Canada signed USMCA, which officials say could happen at a G20 summit at the end of November.

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