This challenge adds to the U.S. complaints about Canada’s import rules for dairy products.
Hearings started last week for the investigation by the U.S. International Trade Commission.
The ITC will examine claims that Canada’s supply-management system – which sets prices for dairy products and restricts imports – is disrupting global markets.
The world’s major dairy exporters – a short list of countries that does not include Canada – are scrambling to find new markets for a growing mountain of dairy proteins, which come from raw milk.
Dairy industries in the U.S., Australia and New Zealand say Canada’s supply management allows the country’s processors to export dairy proteins for cheaper than they could in a free market.
“It just doesn’t make sense that a country with one of the highest prices of milk globally is exporting these products at the lowest prices internationally,” said Shawna Morris, executive vice-president for trade policy and global affairs with the National Milk Producers Federation and the U.S. Dairy Export Council.
She said “there seems to be no limit on Canada deciding to simply continue to use the global markets as its disposal valve.”
I think Canada will lose this one. The World Trade Organization ruled on an earlier case that Canada's supply management system amounts to an illegal subsidy on exports.
Since then, the World Trade Organization banned any agricultural products from trade if the exports are subsidized.
