Dairy farmers watch NAFTA closely

Canadian dairy producers are watching NAFTA renegotiations like a hawk, but predicting what demands U.S. negotiators will make of Canada and Mexico remains somewhere between ‘difficult’ and ‘impossible.’

“Through Dairy Farmers of Canada, we follow those trade talks very closely and we are on the ground at every round,” David Wiens, chair of Dairy Farmers of Manitoba said at a recent DFM meeting in Steinbach. He also said the federal government has done its best to keep dairy farmers informed of developments, saying the group feels they’ve been kept in the loop as never before.

“The Canadian government has been very open with us… throughout the negotiations it is constantly updating us as to what is going on, so that seems to be a little bit different than it has been in some of the other trade discussions that have happened (in the) past.”

The fourth round of North American Free Trade Agreement talks came to a close last week and a fifth round is scheduled to begin in Mexico on November 17. A previous deadline imposed by the U.S. had called for talks to conclude by the end of the year, however, American trade representative Robert Lighthizer has now signalled the U.S. will continue to participate in negotiations until March of next year.

Wiens, who also sits on Dairy Farmers of Canada’s executive, told dairy producers gathered for the meeting that U.S. negotiators have gone from wanting to modernize the trade deal to pushing for radical change.

“The Americans are intent on completely changing it and of course our concern there is in terms of supply management,” he told producers. “When it comes to agriculture, one of their key issues seems to be supply management.”

Media has widely reported that U.S. negotiators demanded an end to supply management in Canada. Not just for dairy, but also for poultry and eggs, during the last round of trade talks.

“All of you would have heard the U.S. has asked Canada in the last round of negotiations to actually completely open up our market to the U.S., and for the Canadian government that is a complete non-starter… that is something it simply won’t even respond to,” Wiens said. “But obviously that is something that demands our attention, and it’s really hard to say how the Americans are going to approach this in the future.”

But dairy producers aren’t alone when it comes to intense demands from U.S. trade negotiators.

“We shouldn’t feel singled out,” he said. “There are other areas of the trade agreement where, as one of the Canadian trade negotiators put it, there are exotic demands — or in other words, ridiculous demands that don’t really make any sense, particularly not in the context of a trade discussion.”

Trade talks have also spurred debate around supply management at home, but Wiens notes that many of the opinions espoused are not well informed. In a recent editorial published by a Toronto-based publication, one author claimed that Canadians pay two to three times more for basic nutrition than necessary because of supply management.

“Those are simply erroneous comments, they are not based on fact,” Wiens said. “There are all kinds of assumptions being made there.”

The third-generation dairy farmer pointed to a study by AC Nielsen that showed U.S. dairy products produced without bovine somatotropin, better known as bovine growth hormone, are actually more expensive than Canadian dairy products. Bovine growth hormone use is not permitted in Canada.

“I think some of these people, some of our critics seem to think that if they say it often enough, therefore it is true, and it simply is not,” he said. “So for them to make those claims about the cost that Canadian consumers are paying is simply not true.

“The other thing is that Canadians can have great confidence in the quality of our milk, of our food safety, what ProAction provides that assurance in terms of quality,” he added.

Dairy farmers are also bracing for the effects of the Comprehensive Economic Trade Agreement between Canada and the European Union, the first phase of which came into effect in September.

“We all know there are 17,700 tonnes that will be allowed in Canada starting this year,” Wiens added. “Then there is also the TPP, which has almost been forgotten about since Trump gave notice they would not be signing on to that deal… At first it seemed that it was, kind of a very, very long shot, but there appears to be more serious discussion around that with those countries involved, so from DFC’s perspective we continue to monitor that, because we have concerns there too.”

 

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