Dairy farms a bargaining chip in USMCA deal, Guelph farmer says

Sean Reid
October 5, 2018

USA dairy farmers remain hopeful a new trade deal with Canada could help lift them out of a deep slump, but some are casting doubt it will make much of a difference in an American market flooded with milk.

Trump administration officials said the USMCA eliminates Canada's "Class 7" pricing system for milk ingredients and opens the Canadian dairy market to us exports at an additional 3.59 percent (an increase from the 3.25% that was negotiated by the Obama administration under the Trans-Pacific Partnership). In a news release, Dairy Farmers of Canada, say they're "deeply disappointed" about Canada's concessions in new deal. "It won't be able to do anything for the fact that the dairy industry is not able to grow and will actually shrink".

The prime minister acknowledged those sacrifices, saying he wants to ensure dairy farmers have confidence in the industry's future.

Class 7 is a domestic pricing class that governs milk ingredients such as skim milk powder and milk proteins.


After months of negotiations and a seemingly endless series of false deadlines, negotiators have hammered out a new trade agreement between Canada, the United States of America and Mexico.

"How do you compensate for that?" "It was great boom to our industry, now that will be reversed", Wiens said. And fixing the USA dairy market was a priority in that agreement.

Congress still has to approve the deal and industry experts say securing new markets will take time. "Trade is important to us, but trade with Canada is not the biggest worrier".

"The government has said repeatedly that it values a strong and vibrant dairy sector - they have once again put that in jeopardy by giving away more concessions".


That's what Cowichan-Malahat-Langford MP Alistair MacGregor told the House of Commons with regards to the new trade deal with the USA and Mexico. "By doing so, it is slowly bleeding Canada's dairy sector". "And it's an agreement that will be profoundly beneficial for our economy, for Canadian families, and for the middle class", Trudeau said. The credit union's CEO, Guy Cormier, said in an interview that Desjardins is analyzing the potential impact while waiting to see whether federal or provincial governments will provide compensation, and will consider whether there are "conditions on their loans that we can work on with [farmers]". "In the U.S.it's in the thousands".

He said this deal - which will revamp the old NAFTA - protects supply management, staves off auto tariffs, and maintains fair hearings in any disputes with our large neighbour to the south. "We have been a leader in encouraging and engaging with other jurisdictions on free trade issue". This decision will stifle innovation, stunt market growth, and create additional losses for those dairy processors who have made significant capital investments recently to improve Canada's domestic processing capacity.

The latest trade agreement, with the United States and Mexico, continues tariffs the US imposed last spring on Canadian steel and aluminum, prompting the industry to criticize the government for selling out the sector.

"It's a win-win for the Americans", she said.


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