Canadian dairy farmers are disappointed by provisions in the new U.S.-Mexico-Canada Agreement (USMCA) that President Donald Trump announced Monday as a replacement for the North American Trade Agreement.
The new deal, once ratified, will make it easier for the U.S. to enter Canada’s restrictive dairy market, in which U.S. imports are discouraged through supply management practices like high tariffs. USMCA requires Canada to remove a policy that made it cheaper for Canadian processors to buy domestic ultra-filtered milk, an ingredient of yogurt and cheese, along with powdered milk and milk proteins, Bloomberg reports.
Under the new agreement, the U.S. can ship more dairy products to Canada tariff-free, including up to 50,000 metric tons of fluid milk by the sixth year of the deal. This means more American products would be the shelves, potentially depressing demand for Canadian dairy products.
“The Canadian dairy market will now be filled by surplus milk,” from the U.S., David Wiens, vice-president of the Dairy Farmers of Canada, told Bloomberg. “It’s not going to resolve any of their issues but they have another dumping ground for their surplus product.”
Trump has long been critical of Canada’s dairy regulations, tweeting in June that their tariffs are “not fair to our farmers.” Thus the dairy market became a difficult point in NAFTA negotiations, with Canada eventually conceding on the issue.
“This is a bad outcome for dairy farmers and the whole dairy sector,” said the Dairy Farmers of Canada in a statement Monday. “The Government has conceded access to our domestic market to the US, affecting our ability to produce Canadian milk. By doing so, it is slowly bleeding Canada’s dairy sector.”