The North American dairy industry is closely watching how North American Free Trade Agreement (NAFTA) talks are shaping up as today marks the deadline for Canada to sign onto the trade deal that was negotiated earlier this week between the US and Mexico. On Tuesday, the US and Mexico reached a breakthrough in NAFTA negotiations, coming to a bilateral agreement on a revamped trade deal which could pave the way for third-partner Canada to join soon.
While the new agreement may signal US intentions to ease tensions between America and its allies, it comes as President Trump is ramping up pressure on China where the trade war between the two world economies is poised to intensify in the months ahead if neither world leader backs down.
At the time, Canada’s Prime Minister Justin Trudeau had yet to further negotiate with the US Administration on a revamped NAFTA deal. As we head into the end of the week, it is not yet known if this will go ahead without Canada. The White House has previously stated that it will go forward with or without Canada and be just a bilateral agreement between the US and Mexico.
The Canadian dairy industry is in the spotlight as NAFTA negotiations heat up and questions are raised over what Canada will do over the supply management system.
Agreement background
The supply management system is an agricultural policy framework used in Canada that encompasses five types of products including dairy which coordinates production and demand while controlling imports as a means of setting stable prices for both farmers and consumers.
According to The Times, Canada is considering making concessions as part of last-ditch efforts to save the reformed trilateral trade deal.
However, Trudeau has previously said that he will defend Canada’s supply management and dairy farmers and the industry is confident with the Dairy Farmers of Canada (DFC): “Canadian dairy farmers took good note of Prime Minister Trudeau’s commitment to defend the dairy sector and the supply management system at the NAFTA table.”
According to the farmers’ advocacy group, dairy farmers and their families have already paid the price for Canada to enter into the Comprehensive Economic and Trade Agreement (CETA) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade agreements, by opening the Canadian domestic market to other countries’ dairy imports.
“These imported products displace Canadian products, so fewer Canadian dairy products are available for our Canadian consumers,” says the DFC. It points out that Canadian milk adheres to some of the highest standards for quality, animal care, and the environment, without the use of the artificial growth hormone rBST. It also says that concessions “weaken a sector that creates jobs and billions for our (Canada’s) economy.”
“The Government supports a strong and vibrant dairy sector; it must ensure that dairy farmers and their families are not impacted negatively by the present negotiations,” the group concludes.
