Canada's finance minister touts USMCA but says dairy, steel sectors need help

Kenny Grant
October 5, 2018

The new trade deal between the U.S., Mexico and Canada could change the prices on the next auto you drive, the medicine you take, and the milk you drink.

Talks to lift the tariffs continue, but on a "completely separate track", according to a USA official.

"It would be nice to be able to make sure that we can become more competitive, if that's what they mean by the compensation", he said. Hundreds of people from across the country are checking out booths with everything from robotic milking machines to cow-themed artwork.

The Canadian supply management system provides quotas for the amount of milk each dairy farmer can produce, limiting overproduction in Canada that can lead to lower prices.

KIRWAN: That's dairy farmer Katie Ziemer. Of course we all want to protect and promote our products within our countries, but you can't have it both ways.

The most critical aspect of free trade with the USA is auto exports.

"I acknowledge the work of premiers across Canada for helping to keep these relationships strong and showing leadership over the past months".

KIRWAN: The average dairy farm has struggled to make a profit for years.

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According to farmers, the new deal will weaken the Canadian dairy industry by limiting exports and opening up the domestic market to more American products, concessions that could means hundreds of millions of dollars less in revenue for the industry, which now brings in about $5.9 billion in farm-gate revenue each year. "It's not whole milk that they ship".

Dairy cows at a county fair in NY. The goal was to boost domestic sales. However, the US doesn't want competition in its market for those types of products.

Bruno Letendre, head of the association that represents Quebec's milk producers, said the concessions are the equivalent of 13 days fewer production for his members. We focus on federal dairy policy.

The USMCA is the third free-trade agreement in which Canada has agreed to open access to its supply-managed sectors, this time including increased access for eggs, chicken and turkey.

The tariffs of 25 per cent for steel were bad news for about 10,000 direct steel production jobs in Hamilton, at companies like ArcelorMittal Dofasco and Stelco, and 30,000 other jobs as that could be made more insecure, the local chamber of commerce has estimated.

The Canadian dairy sector employs more than 220,000 Canadians and contributes close to $20 billion a year to Canada's gross domestic product. And that began to compete directly with US export sales. In the last week or so you have seen deals put in place or agreements put in place that preserve zero tariff access to three of US pork's top five export markets, so a bit of a momentum shift and that's really good news for USA pork producers. And so whatever access, you know, has been given to our market, you know, is not going to really change the surplus milk situation in the U.S. But he, like farmers, remains concerned about unresolved trade partner issues.

The American Dairy Coalition (ADC) is a farmer-led national lobbying organization of progressive, modern dairy farmers.

"Today's announcement regarding the United States-Mexico-Canada Agreement is welcome news".

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