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

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
 market
 access
 for
 New
 Zealand’s 
monopolistic 
dairy
 sector
 would 
be especially 
damaging
 to 
US 
dairy 
farmers 
and 
those
 who 
produce
 and 
process non-fat
 dry 
milk, butter fat
 or
 cheese," said the letter.

“The 
US 
dairy 
industry
 generates
 $140
billion 
in 
economic
 activity 
and
 employs
 an estimated 
900,000
 workers, while
 providing
 nourishment 
to 
millions 
more. The
 nation
 simply 
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.