Published: Fri, April 21, 2017
Research | By Jo Caldwell

Saskatchewan Dairy Industry not surprised by criticism from US president Trump

Canada imposed import taxes on ultra-filtered milk, a protein liquid concentrate used to make cheese. "Canada is the second-largest export market for US dairy products, surpassed only by Mexico", she said.

The president took issue with Canadian changes on milk classification that he said have put farmers in Wisconsin and NY state out of business.

Trump made similar remarks in Wisconsin on Tuesday, calling the dairy trade relationship between the United States and Canada "very, very unfair".

Canada changed its policy on pricing domestic milk to cover more dairy ingredients, and the change that took effect in February led to lower prices for Canadian products including ultra-filtered milk that compete with the US product.

Canada's Ambassador to the United States, David MacNaughton, sent a letter to two USA governors on Tuesday night, a few hours after President Trump's speech in Wisconsin.

"I am disappointed that the representatives of the Canadian government have not demonstrated the sense of urgency that we in Wisconsin feel about the crisis impacting so many of our local dairy farms", Senate Majority Leader Scott Fitzgerald said in a statement afterward, adding that he was encouraged that a dialogue had at least been opened with Canada. New Zealand Trade Minister Todd McClay told Reuters in an email his government was assessing the "WTO-consistency" of Canada's dairy industry policy and had raised concern with the Canadian government.

Canada's supply management system works well, Dumontier says, keeping prices and supply stable without the need for subsidies.

He reiterated his belief that the North American Free Trade Agreement, which he has vowed to renegotiate, has been hurting the US economy. "It's a disgrace", Trump said.

But Trump returned to Tuesday to the economic tough talk of his campaign, saying: "We're going to make some very big changes or we are going to get rid of NAFTA for once and for all", referring to the Clinton-era USA trade pact with Canada and Mexico. During the election, Trump repeatedly attacked NAFTA, but always did so in reference to the USA relationship with Mexico. Malcolm Bailey, chairman of the Dairy Companies Association of New Zealand, said his organization was working with his foreign ministry to gather information for a possible WTO complaint.

MacNaughton said it remains to be seen how quickly NAFTA talks can get underway because of a looming election in Mexico, and the fact the U.S. Congress still hasn't granted negotiating authority to the Department of Commerce.

"It is wrong to use Canada as a scapegoat for the situation in the United States". Between 1971 and 2012, the number of dairy farms in Canada declined by 91 per cent, according to a report written by former Liberal MP Martha Hall Findlay for the University of Calgary's school of public policy.

With Trump - who has said he wants to renegotiate the North American Free Trade Agreement - now in the Oval Office, Freeland went on to defend Canada's trade policies not only on dairy, but also on wood products and oil. "Our relationship with the US administration is extremely strong and I think it's going to pay dividends in the long run".

Trump says Canada has been "very, very unfair".

Following that meeting, Trump said he only wanted to "tweak" the USA relationship with Canada under NAFTA.

More than 75% of Canada's exports go to the US, and only 18% is imported from U.S.

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