NMPF calls for 'significantly increased' access to Canadian dairy market

By Fiona Barry

- Last updated on GMT

President Barack Obama and Prime Minister Stephen Harper (Picture Credit: Pete Souza/White House)
President Barack Obama and Prime Minister Stephen Harper (Picture Credit: Pete Souza/White House)

Related tags: International trade, Canada, Us

The National Milk Producers Federation’s (NMPF) has approved a resolution opposing any Trans-Pacific Partnership (TPP) agreement which does not substantially dissolve Canadian protections against US dairy imports.

Under the resolution, the NMPF, which represents the interests of several major US dairy cooperatives, has demanded “significantly increased access to the Canadian dairy market.​”

It has also called on the US Trade Representative’s Office and the US Department of Agriculture to “negotiate an agreement with Canada that eliminates barriers to trade and provides for mutually open dairy markets​”.

Since 1995, Canada has placed tariff rate quotas (TRQs) on dairy imports. Imports above the quota limits are subject to tariffs of between 200% and 313.5%.

For instance, the TRQ for yogurt is 332,000 kilograms (kg). Exceeding this, imported yogurt is subject to over-quota duties of 237.5%.

Milk producer opposition

There is opposition to dairy trade liberalization from farmers’ groups on both sides of the border.

The Canadian labor union, Teamsters Canada, issued a statement reminding its government that dairy protections have survived many previous trade talks.

According to the union, Canadian jobs are at stake.

Like the dairy farmers and processors with whom we work, Teamsters Canada expects the government will defend the stability of the Canadian dairy industry, which supports over 200,000 good middle class Canadian jobs, in these TPP talks,” ​said the statement.

Likewise, US unions previously pleaded for dairy to be kept off the table at the TPP negotiations - expressing fears that domestic produce would be pit unfairly against New Zealand-manufactured products if a free trade agreement was established between the countries.

In March 2013, 11 such groups, including the National Farmers Union and the National 
Dairy Producers
 Organization hand-delivered a letter to Capitol Hill urging against relaxing trade barriers.

New marketaccess forNew Zealand’s monopolistic dairysectorwould be especially damagingto US dairy farmers and thosewho produceand process non-fat dry milk, butter fat or cheese," ​said the letter.

The US dairy industry generates $140billion in economic activity and employs an estimated 900,000 workers, while providing nourishment to millions more. The
 nationsimply cannot afford to compete with dairy imports produced under unfair
 conditions," ​it added.

Sizable opportunity for foreign dairy

Despite tariff barriers, Canada provides a sizable opportunity for foreign dairy processors. In 2011, the value of Canadian dairy imports increased 10% to $670m (US$645m). Its greatest supplier is the US, which has a 40.6% share (by value) of imports, followed by France (12.3%) and New Zealand (11.3%).

US manufacturers of specialty cheese and dairy ingredients could benefit from the lifting of trade barriers, as Canadian supplies do not meet domestic demand.

Similar trade talks between Canada and the European Union (EU) have dragged on since 2009; the EU also wishes Canada to open up its markets to foreign dairy. Prime Minister Stephen Harper returned from Europe earlier this week unable to finalize a trade agreement with officials in Europe.

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