Published: Thu, April 20, 2017
Global Media | By Meredith Barber

Trump wins support for possible WTO action on Canada dairy

Trump wins support for possible WTO action on Canada dairy

Trump said during a speech in Kenosha, Wisconsin, on Tuesday that Canada has been "very unfair" to dairy farmers and "we're going to start working on that".

Canada recently changed its policies on ultra-filtered milk, a protein liquid concentrate used to make cheese, to favour domestic suppliers over USA producers.

Canadian farmers' claim that they produce products that are far above US standards will also be tested, and it could finally disrupt Canadian farm industries that are worth about $10-billion annually.

President Donald Trump has questioned Canada's dairy trade practices.

Trump launched his broadside after a brewing trade spat that has seen the USA dairy lobby accuse Canada of "systemic disregard" of its trade obligations, while the Canadian industry accused its American rival of "scapegoating".

"All I can tell you is I've had ongoing discussions with the White House ... and all of those discussions have been positive and professional - they've been extremely responsive", said MacNaughton.

Standing up for dairy farmers in Wisconsin "demands fair trade with all of our trading partners", Trump said, "and that includes Canada".

Trump said US farmers are being subjected to "another typical one-sided deal against the United States" and vowed to drive a hard bargain in pending trade talks during an event at a Kenosha, Wis. tool factory on Tuesday. "So they're displacing the USA product that's coming into Canada", said von Massow.

MacNaughton also said the trade balance on dairy "massively" favours the a five-to-one margin.

About 70 dairy producers in both Wisconsin and NY are affected by the new rules, and have lobbied the USA government for action on the file. A big part of their problem, says von Massow, was that Canada was being flooded with duty-free American ultra-filtered milk because it was invented after the North American Free Trade Agreement, and therefore wasn't subject to duties.

"Canada doesn't accept the contention that Canada's dairy policies are the cause of financial loss for dairy farmers in the United States", wrote ambassador David MacNaughton.

Smith, however, defended the system and said without it the rest of the world is in a situation where they're producing a milk surplus.

A spokeswoman for Canada's dairy industry said Tuesday night there have not been any new taxes on dairy imports.

Luis Ribera, an agriculture economics expert at Texas A&M University, said that while the ultra-filtered milk issue may technically fall outside the scope of NAFTA, it is a sign of USA anger towards Canada's supply management system.

That prompted Canadian farmers from a variety of provinces to lobby for the creation of a new classification of milk product that could be priced competitively with American imports. And that means it will likely be on the table of any future NAFTA renegotiation.

"We understand that the USA wishes to do the same for its industry".

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