Dairy trade dispute with Canada a 'disgrace' caused by NAFTA

Toby Manning
April 21, 2017

Trump also took the opportunity to slam NAFTA, the free trade deal linking the US, Mexico and Canada, calling it a "disaster for our country". "It's a disgrace", Trump said in the Oval Office, without elaborating on what he meant.

Von Ruden stated that all the overproduction of milk is bad for the industry and the USA needs to do a better job at maintaining supply levels that meet customer demand.

This is the same president who recently played down irritants with Canada; he said he just wanted to do a little trade tweaking. "We're going to get the solution".

Freeland said that Canada buys more from the USA than any other country, including the European Union, Mexico, China and Japan and that nine million jobs in the US depend on trade and investment with Canada.

President Donald Trump has shifted his sharpest economic criticism away from the southern USA border and toward the neighbor to the north. "It's a disgrace", he said.

The trade dispute is affecting dairy farmers in northern US border states, such as Wisconsin, New York and Minnesota, and prompted Trump to announce that his administration will propose changes to NAFTA in two weeks.

Experts said it's too early to see how the termination of these contracts will affect prices for consumers, but the move could force family farms in Wisconsin out of business, meaning less dairy production over time.

Trump is complaining about trade with Canada in three specific areas: lumber, energy, and dairy and he says the USA can't let Canada or anyone else take advantage of America.

The G7 follows the North Atlantic Treaty Organisation leaders' summit in Brussels, which Trump and Trudeau are expected to attend.

"My guess is that the USA will seek greater access for dairy exports, as did the European Union in CETA, and that will be another "ask" in the mix".

He attached a February 17 report from the U.S. Department of Agriculture that he said showed the American industry's woes were the result of "U.S. and global overproduction" of milk. "And that includes Canada", Trump told the crowd. Canada's policy change has led to lower prices for Canadian products including ultra-filtered milk that compete with the US product.

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. Canadian Foreign Minister Chrystia Freeland, asked for a reaction, rejected the suggestion of wrongdoing.

Relations with the US are crucial as more than 75 percent of Canada's exports go to the USA, while 18 percent of USA exports go to Canada.

"It is part of the government of Canada's strategy to make arguments and make friends", he said.

Other reports by VgToday

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