US and Canada clash over NAFTA dairy trade negotiations

17-Oct-2017 - Last updated on 17-Oct-2017 at 11:12 GMT

As the fourth round of NAFTA negotiations closes, the US has made a direct demand for Canada to get rid of its dairy supply management system. ©GettyImages/lukbar

Related tags International trade Milk

The US has demanded an end to Canada’s supply chain management system for dairy products within the next 10 years as it nears the end of a fourth round of NAFTA talks outside of Washington, D.C.

Dairy Farmers of Canada president, Pierre Lampron, reportedly called the demands by the US “outrageous,” according to a Reuters report.

The US has been pushing for an end to Canada’s trade barriers, particularly its milk classification system, since it was implemented in April 2016. The system has slashed US exports of ultrafiltered milk by allowing Canadian dairy producers to purchase a similar product for a competitive price within Canada.

IDFA said it will continue to push for NAFTA negotiators to address issues with Canada’s use of new milk pricing policies that place high tariffs on US dairy exports to Canada before the fourth round of NAFTA talks began late last week.

“Securing NAFTA provisions that curb these actions is the most important way we can ensure that new Canadian market access is meaningful for US dairy companies and that US dairy products can compete fairly in third-country markets,” IDFA president and CEO, Michael Dykes, said.

However, Laurent Lessard, Canada’s Minister of Agriculture, Fisheries, and Food, said that it is Canada’s priority to maintain its current supply chain management, which would put thousands of dairy producers at risk.

“This system, which has proven its mettle, gives producers income stability and provides consumers with reliable supply. I insist on the fact that supply management is not negotiable," Lessard said.

Other US dairy trade priorities

Going into the fourth set of NAFTA renegotiation meetings, Dykes said the first priority for the US dairy industry will be protecting its export market in Mexico.

NAFTA negotiators may also discuss adding provisions to block the EU’s attempts to restrict the use of common food names in Canada and Mexico. Last month, the EU and Canada provisionally implemented a bilateral trade pact that blocks American dairy companies from using the common cheese names Asiago, Feta, Fontina, Gorgonzola and Muenster. The EU is currently revising its pact with Mexico to achieve similar exclusions.