US dairy calls on Trump to fix Canada’s ‘protectionist’ trade policies

12-Jan-2017 - Last updated on 16-Jan-2017 at 10:46 GMT

US dairy groups estimated the Canada's prohibitive dairy trade policies has cost the US $150m in ultra-filtered milk exports.©iStock/steverts

In a letter to President-elect Donald Trump, US dairy groups said that Canada’s “protectionist” trade policies are intentionally designed to block imports from the US and are in direct violation of commitment made under the North American Free Trade Act (NAFTA) and the World Trade Organization.

This is the second letter the US dairy industry has written to Trump since he was elected to office urging him to act on Canada’s “unacceptable” trade policies in the week Trump is sworn in as President.

In the letter, leaders of the International Dairy Foods Association (IDFA), National Milk Producers Federation (NMPF), US Dairy Export Council (USDEC), and the National Association of State Departments of Agriculture (NASDA) said that Canada already imposes “exorbitant tariffs” on imports and that only limited access to the Canadian market is granted by NAFTA.

One particular concern is Canada’s National Ingredient Strategy, which allows Canadian dairy processors to buy domestic milk at lower prices than the national supply management system. The US dairy groups said that this allows processors in Canada to buy domestically and cut milk imports.

What US dairy groups fear

The US dairy groups outlined and quantified the detriment this could have to the US economy. According to the USDA, $1bn of US dairy exports generates more than 20,000 jobs for Americans and almost $3bn of economic output.

The dairy groups said that some US dairy suppliers are reporting declining revenues and jobs for dairy farmers and processors.

“This negative impact is conservatively estimated at $150m worth of ultra-filtered milk exports being lost by companies in Wisconsin and New York, which are highly reliant on their trade with Canada. In fact, the entire US dairy industry is being hurt, as milk prices are being driven down nationally by Canada’s trade actions,” the groups said.

“Having an even wider impact on America’s dairy farmers and processors, additional large volumes of skim milk powder will be forced onto the thinly traded global market resulting in a further depression of prices that will negatively impact the revenues of dairy farmers around the world.”

Copied on the letter was Robert Lighthizer, the Trump Administration’s nominee for U.S. Trade Representative, along with the leaders and members of the House and Senate agricultural committees.