Canada’s supply management system is back on America’s radar.
Seventeen U.S. dairy companies have written a letter to 25 American governors demanding they push back against a proposed national ingredient strategy currently being considered by Canadian industry.
American farm groups say the policy is expected to take effect Feb. 1.
“We urge you to prepare to take direct action at the state level to underscore to Canada that deliberately and systematically damaging U.S. exports in this way will not be tolerated,” the letter reads.
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A similar letter from 37 American dairy groups was sent to U.S. President Donald Trump’s administration Jan. 11.
North of the border, it’s unclear whether the policy will take effect Feb. 1.
Canadian industry officials held a meeting last week on the proposed ingredient strategy, which has already been delayed twice. When asked about the meeting’s outcome Jan. 27, Dairy Farmers of Canada said there was nothing new to report.
The proposed ingredient strategy expands on milk class changes made in Ontario last year that were done, in part, to try and dissuade U.S. imports of diafiltered milk.
The national strategy was supposed to be implemented Sept. 1 but is now being reviewed by the Canadian Milk Management Committee. Details of the agreement have not been made public. Dairy Farmers of Canada said in July those specifics would not be released publicly until the agreement was ratified.
The ingredient strategy isn’t the only dairy-related beef the Americans have with Canada.
U.S. dairy producers and processors are also pushing to ensure supply management is on the table if the two countries sit down to renegotiate the North American Free Trade Agreement. Supply management is exempt from the trilateral trade deal, to the Americans’ chagrin.
Federal Agriculture Minister Lawrence MacAulay has repeatedly said the Trudeau government believes in Canada’s supply management system, although none in the federal cabinet has said how they plan to keep the system off the negotiation table.
When asked, MacAulay has repeatedly opted to take a wait-and-see approach.
Canada made concessions on supply management during the Trans-Pacific Partnership agreement talks. Here in Ottawa, few expect the Americans to be willing to negotiate a new NAFTA trade deal without using the TPP concessions as a precedent.
U.S. dairy groups have told the new American president that dairy access to Canada must be included in any NAFTA renegotiation.
“The North American Free Trade Agreement has opened a major door to Mexico that we don’t want slammed shut,” National Milk Producers Federation president Jim Mulhern said in a statement Jan. 23 that accompanied a letter on NAFTA and agriculture sent to Trump by 130 American farm groups.
The U.S. Dairy Export Council echoed the sentiment in a statement Jan. 30.
“Despite Canada’s efforts to distance itself from the administration’s focus on enforcement and improving how NAFTA functions, it is Canada — not Mexico — that has time and again chosen to disregard its dairy trade commitments to the United States and intentionally dismiss serious concerns from the United States about the impact its dairy policies are having on trade,” the dairy export council said.
“Canada should take a page out of Mexico’s book and hold up its end of the bargain to us on dairy trade.”
The new U.S. president has been silent about the issue, which doesn’t mean his position can change.
In his first week of office, Trump has already shown how unpredictable he can be, routinely taking to Twitter and signing unexpected executive orders.
Trump has tremendous support in rural America, including in states such as Wisconsin where dairy is a key industry. He has promised to make America great again. For U.S. dairy farmers, that could very well mean trying to end Canada’s supply management system.
