Sunday, 21 October, 2018

Trudeau praises USMCA, as government promises compensation for dairy farmers

Dairy farmers in Ontario are expressing concern about the new USMCA trade deal Dairy farmers in Ontario are expressing concern about the new USMCA trade deal
Jodi Jackson | 05 October, 2018, 08:27

KIRWAN: The average dairy farm has struggled to make a profit for years.

So Ziemer and others here say the opportunity to sell more dairy to Canada under the new U.S. -Mexico-Canada Agreement could help U.S. farmers, though marginally. "They are dumping milk left, right and centre".

The USMCA is thus the third free trade agreement in which Canada has agreed to open access to its supply-managed sectors, to the tune of 3.59 per cent of the dairy market as well as increased access for eggs, chicken and turkey.

"Mexico is our largest apple export market, it's our largest pear market".

Martin mentioned Canada's recent implementation of a pricing policy, known as Class 7, that put a high tariff - around 200 percent - on non-domestic ultra-filtered milk ingredients such as protein concentrate, skim milk powder and baby formula, making it cheaper for Canadian processors to buy domestic supplies for cheese. "It's basically surrendering on fixing NAFTA".

But an argument could be made that with this new deal, plus the European Union agreement and Trans-Pacific Partnership, Canada has effectively negotiated new trade agreements with all the major dairy exporters around the world. Maxime Bernier split from the party last month to launch his own entity, calling the Conservatives "intellectually and morally corrupt" in part because of its support for dairy protections.

The new trade pact is significantly better than an all-out trade war, but won't be a game changer for Canadian growth, said CIBC chief economist Avery Shenfeld. "Were opening more of our domestic market, but we're doing nothing to enhance our ability to expand into other global markets".

"TPP, the Asian agreement, and the European agreement, we're down 10 per cent in the past year, so, it's the number of cows but it's also, our net income is down 10 per cent".

"Unto themselves, the Canadian consumer will not be the solution for USA dairy supply or over-supply". Any dairy imports above the 3.6-per cent threshold still face Canada's punishing tariffs, which were a sticking point in negotiations with the U.S.

DAVID WIENS: You know, Wisconsin produces more milk than all of Canada does. "We are continuing to review the details of this new agreement to see if it meets the test of protecting American workers".

KIRWAN: And some American farmers are starting to question whether the new trade agreement will really be all that helpful. "However, the absence of details on measures to mitigate the impact of the concessions made within the USMCA, as well as the absence of a vision for the future of our industry at this time, can not appease the concerns of the dairy farmers". So this a - certainly a Band-Aid and not a fix.

According to USA figures, America exported about $600 million worth of dairy products duty-free to Canada previous year - over three times what it bought from here - but anything above that is subject to tariffs of up to 300 per cent.

"USMCA is definitely the wrong deal for Canada's dairy sector-its farmers, processors, and the thousands of hard-working Canadians they employ", says Mr. Frigon.

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