The National Milk Producers Association in the United States
levelled a broadside against Global Affairs Minister Christia Freeland on the
eve of the beginning of the negotiations to revamp the North American Free
Trade Agreement.
Freeland said this week that she intends to retain supply
management for Canada’s dairy and poultry industries.
The National Milk Producers Association says that’s heading
in the opposite direction from most countries, including the U.S., which are reducing
their government supports for their dairy industries.
It is particularly upset that the Canadian milk marketing
boards have set up a new Category 7 to price milk low enough to displace
imports of diafiltered milk.
The Americans say that has sharply increased Canada’s supply
of skim milk powder and its exports.
The U.S. has already served notice that it intends to file a
complaint with the World Trade Organization about the skim milk powder exports.
It earlier won a similar complaint about Canadian export,
successfully arguing that they were only possible because Canadians can
cross-subsidize the low-priced products from the high prices they receive for
most milk.
Here’s what the association said:
“For too long, Canada has relied on government controls on farm milk
production to boost prices, while minimizing dairy imports to limit
competition. By comparison, the United States has slashed its government
involvement in dairy markets, and relies on exporting its products to global
customers to a greater degree than ever before.
“That’s why the United States and other major dairy exporting nations,
including Mexico and Argentina, are so upset with Canada’s latest Class 7
pricing scheme that is designed to undercut world market prices and unfairly
dump Canada’s surplus milk at the expense of the United States and other
exporters.
"Ironically, Canada’s so-called ‘supply management’ system is failing
to manage supply. Despite having no domestic market for more milk solids, the
government there has sharply increased farm level production quotas, resulting
in an accompanying spike of almost 300 percent in Canadian milk powder exports
in 2017 so far.
"These exports are only made possible because Canada manipulates
domestic pricing through the Class 7 subsidy scheme.”
