Latest NAFTA talks wrap, U.S. demands Canada end supply management

The fourth round of NAFTA negotiations wrapped up earlier this week with one certainty: there will be more talks.

Despite an earlier U.S.-imposed deadline of the end of this year to reach a deal, trade representative Robert Lighthizer announced the country would participate in negotiations at least until the end of next March.

The fifth round begins Nov. 17 in Mexico.

The most recent talks included a U.S. demand that Canada dismantle its supply management system for dairy, eggs and poultry within 10 years.

Dairy Farmers of Canada president Pierre Lampron said this, and every demand from the U.S., is an “overt denial of Canadian and Mexican sovereignty.”

In a posting on the organization’s website, Lampron said the American demands are an attempt to create a world economy in which the U.S. economy “Trumps” all others.

“If the goal of the re-negotiation of NAFTA is to annex Canada and Mexico as American territories the President should just be honest and say so,” Lampron said. “On the other hand, if the goal is to come to a mutually beneficial deal that would not amount to political suicide in any of the three nations in question, the U.S. may want to re-think their approach.”

The Canadian government has been clear in its support for supply managed sectors throughout the negotiations so far.

Lampron said dairy isn’t a make-or-break issue for the Americans because the U.S. already enjoys a 5:1 trade balance with Canada in that sector. Automotive and steel play a far larger role in the U.S. economy, he said.

The fourth round ended on a somewhat bitter note as Lighthizer and Canadian foreign minister Chrystia Freeland openly disagreed while Mexican economy minister Ildefonso Guajardo tried to be conciliatory.

The U.S. claims Canada and Mexico take advantage of it, while Canada said the U.S. is tabling illegal demands that don’t follow World Trade Organization rules.

Freeland said the US is trying to turn back the clock with its demands and there can’t be a win-win-win situation with a winner take all attitude.

Lighthizer said he was surprised that Canada and Mexico were so resistant to change.

“Frankly, I am surprised and disappointed by the resistance to change from our negotiating partners on both fronts,” he said during a joint news conference. “I understand that after many years of one-sided benefits their companies have been reliant on special preferences and not just comparative advantage.”

Mexican economy minister Ildefonso Guajardo urged his counterparts to continue to talk and avoid a “lose-lose-lose” scenario.

“This was the round at which some of the really hard issues came to the table,” Freeland told reporters at a later news conference. “It’s important for us to acknowledge where there is a significant distance.”

But she said there was a positive outcome in that they decided to extend negotiations and agreed to have more time between rounds.

“Experienced trade negotiators will tell you that the extremely compressed timetable that we were working on while perhaps appropriate for the easy stuff just doesn’t work when you are tackling more complex issues,” she said.

“Our approach to NAFTA, as to all issues, is to hope for the best and prepare for the worst.”

Contact karen.briere@producer.com

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Comments

  • Kissing optional

    Why isn’t it Canada that is making demands on the imbalance tilting toward the Americans.
    Things such as the massive discounting of Canadian oil…or
    The removal of Canadian water as an inherent right for Canadians to being a commodity for the likes of Nestle??

  • appaulled

    It is very rich that theUSA comes with demands to dismantle supply management while heavily subsidizing its own Agricultural sector. My response would be to agree to eliminate supply management provided all subsidies ( including water diversion projects paid for by State and Federal governments and not billed back to producers) in the same time frame.

  • Bruce

    The United States should be using the Canadian supply management system. Which works excellent in Canada. Then the American taxpayers could save billions of dollars per year paying American producers to go around overproducing too much dairy products.

    • ed

      Great idea, but you have a hard time breaking the collective system that Canada has without that cheap US milk and milk products in which to do it with.

      • Kevin Auch

        Is it “Cheap”, or is it reflecting the market price that would exist without massive import tariffs maintaining the high prices here?

  • ed

    Yes, it is a highly subsidized product for sure. That makes it cheap as compared to it’s actual cost of production. You need to subsidize it heavily to keep farmers in business or have a system that maintains a milk price that provides a living wage for the dairy farmers. If you do not do one of those two things, the farmers will go into receivership and the price of milk will go up aubstantially and you may not get some when you want it. Supply and demand. $15 for a 4 Litre up north already. Milk for the rich, right.

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