April 19, 2017

US dairy sector accuses Canada of blocking milk exports

The US dairy sector has accused Canada of disregarding its trade obligations under the North American Free Trade Agreement (NAFTA) by, among others, implementing a new national pricing policy that allegedly blocks American dairy exports and which will enable significant dumping of Canadian dairy products onto the world market.

As a result, dozens of dairy farmers in the Midwest recently learned they must find new customers for their milk by May 1, according to the US Dairy Export Council (USDEC), a non-profit, independent membership organisation. Otherwise, it added, they might be forced to go out of business.

USDEC, together with the International Dairy Foods Association (IDFA), the National Milk Producers Federation (NMPF) and the National Association of State Departments of Agriculture (NASDA), urged the Trump administration to tell Canadian Prime Minister Justin Trudeau to halt the new pricing policy and restore imports of the blocked US products, specifically ultra-filtered milk.

They also asked President Trump to direct US agencies to "examine a full range of tools that could be used immediately to impress upon Canada in a concrete way the importance of dependable two-way trade".

"US dairy exports support approximately 110,000 jobs across America, many of which are in farming and food manufacturing, as well as in supporting rural manufacturing and skilled farm service workers," the organisations said in a joint letter to Trump. "However, for trade to yield its full potential and provide the maximum impact possible in supporting American jobs, our trading partners must hold up their end of the bargain as well."

They said Canada should be one of America's most reliable trading partners, but "in the case of dairy it has consistently chosen to pursue a disturbing and harmful path".

Earlier this year, a group of 17 dairy companies representing dairy farmers and processors from all over the US asked governors in 25 states to urge Canadian policymakers to halt the national implementation of the milk pricing system.

NMPF, USDEC, IDFA and NASDA also raised the matter with Trump in January before he assumed office.