Can Canada uphold dairy supply management while giving U.S. more access?
The U.S. has long complained that Canada severely limits access to its dairy market through supply management, even threatening new tariffs over it. Here's what they want changed.
As Canada and the U.S. negotiate a new trade deal, a crucial issue has emerged: how to balance supply management for Canada's dairy industry with granting greater access to the U.S. dairy market. Supply management, which allows a certain amount of tariff-free exports under quotas, has been a point of contention between the two nations, as it limits U.S. access to Canada's dairy market.
The U.S., particularly under former President Donald Trump, has long complained about this restriction, claiming it imposes substantial tariffs on American farmers.
Canada's Trade Minister Dominic LeBlanc has stated that supply management will remain intact within the new deal, but has not revealed any changes to its terms. However, the U.S. dairy industry argues that the problem lies not with supply management itself, but with how it has been used to block American dairy products under the Canada-U.S.-Mexico Agreement on free trade (CUSMA).
According to Jamie Castaneda, executive vice-president of policy development and strategy at the U.S. National Milk Producers Federation, the U.S. dairy industry never sought to change supply management.
The CUSMA increased U.S. access to Canada's dairy market by allowing a set number of tariff-rate quotas for American exporters to sell their products duty-free. The Dairy Processors Association of Canada states that this system grants the U.S. access to nearly four percent of the Canadian market. However, some, like Mike von Massow, a food economist and professor at the University of Guelph, argue that allocating quotas to processors, rather than distributors or retailers, reduces incentives for U.S. producers to import American dairy products.
The issue remains contentious, with the Canadian Dairy Farmers of Canada claiming expanded U.S. market access has resulted in over $140 million in annual losses for Canadian dairy processors. Meanwhile, the U.S. Dairy Export Council maintains that Canada is honoring its CUSMA obligations but not its spirit, as most of the quotas go to processors instead of distributors or retailers who could actually import the dairy products.
Canada's dairy sector also worries that any further concessions to the U.S. could reduce production quotas for domestic dairy producers, leading to wasted product and lost revenue.
Written by urgent.news from Global News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
