Jaime
Castaneda, senior vice-president with the National Milk Producers Federation in
the United States, said American dairy producers had tolerated the existence of
supply management, but Canada went too far when it a created a new class of
milk.
Until now,
most of the talk has been about getting rid of this new low-priced class for
Canadian milk sales.
Now the U.S.
industry has formed an alliance with Mexico and their goal is elimination of
Canadian supply management.
The issue of
low-priced milk arose after importers learned they could escape protective
tariffs by importing a new product not listed in the tariff schedule –
diafiltered milk.
Canadian
processors began importing a trickle of the diafiltered milk, then it became
dozens of tanker truckloads that the milk marketing boards say was taking a
$200 million-a-year bite out of their market.
When they
persuaded the processors to stop importing in return for the offer or lower
prices for Canadian-produced milk, it angered U.S dairy farmers who caught the
attention of President Donald Trump when he was in Wisconsin.
He promised
to help them.
While news
media attention if focused on the NAFTA negotiations in Ottawa, there is
another serious threat to the new milk pricing system if and when the World
Trade Organization agrees to delve into a complaint from the United States.
The World
Trade Organization has already ruled that Canada can’t export dairy products
made from lower-priced milk because it amounts to cross-subsidization, and
export subsidies are not allowed.