October 2, 2018
US dairy organisations welcome breakthrough in US-Canada trade deal
US dairy organisations have welcomed the latest update to the NAFTA agreement, now known as US-Mexico-Canada Agreement (USMCA), for helping to limit Canada's "trade-distorting practices," according to the US Dairy Export Council (USDEC).
Together with the National Milk Producers Federation and the International Dairy Foods Association (IDFA), the USDEC thanked US negotiators for securing a more favourable deal for the US dairy sector.
The revised trade agreement would entail the removal of Canada's Class 7 pricing system, as well as the availing of more market access to the Canadian market. Both objectives are at the top of the US dairy sector's demands.
"The groups look forward to reviewing the text of the US-Mexico-Canada Agreement (USMCA), in particular the dairy provisions, to better understand the benefits to US agriculture and dairy," USDEC added.
Referring to Canada's decades-old restriction of milk imports and milk, the council views the country's Class 7 pricing system as creating direct competition with exports from the US and other nations, as Canada dumps surplus milk proteins into global markets.
"From a strategic standpoint, the agreement... will benefit America's dairy sector because it preserves the overall structure of the 24-year-old North American Free Trade Agreement (NAFTA)," the council stated.
Also, with outlines of the NAFTA pact remaining intact, the US agricultural sector could continue developing new international markets for its farmers, said Tom Vilsack, president and CEO of USDEC.
"We also need to pursue new free trade agreements with other nations and resolve our trade conflicts with China. It is imperative that the United States remains an integral player in driving the global trade agenda," Vilsack commented.
"...this agreement, when implemented, should give us additional marketing opportunities that will allow us to provide high-quality American dairy products to Canada, which means we have made incremental progress," said Jim Mulhern, president and CEO of the National Milk Producers Federation.
"Maintaining dairy market access in Mexico and improving market access into Canada were IDFA's top priorities during the talks to modernise the North American Free Trade Agreement," said Michael Dykes, president and CEO of IDFA. "We are also pleased that the (Trump) Administration was successful in getting Canada to eliminate Class 7 pricing. This new agreement will preserve our vital partnership with both countries and allow the US dairy industry to seek more export opportunities."
The dairy groups added that the ultimate benefit of the new USMCA will depend on how it is implemented.
Also, now that a tentative trilateral agreement has been reached, the dairy organisations urged the governments of the three nations to remove their tariffs on agricultural exports - as well as steel and aluminum - that have been sticking points in relations between the US, Mexico and Canada.
- US Dairy Export Council