Canada’s ambassador to the United States is rejecting President Donald Trump’s assertion that Canadian dairy policies are to blame for challenges faced by U.S. dairy producers.
The dispute over dairy trade policy has gained mainstream media attention after Trump accused Canada during a stop in Wisconsin on Tuesday of “a typical one-sided deal against the United States.” The president said he was going to “call Canada” to “get a solution, not just the answer.”
“Canada does not accept the contention that Canada’s dairy policies are the cause of financial loss for dairy farmers in the United States. The facts do not bear this out,” wrote David MacNaughton, Canada’s ambassador in Washington in a letter published Tuesday night (read the entire letter here.)
The letter is addressed to New York Governor Andrew Cuomo and Wisconsin Governor Scott Walker, who have both asked Trump to act on Canada’s dairy import policies.
MacNaughton highlights the U.S. Department of Agriculture’s 2017 dairy outlook, noting it “clearly indicates that poor results in the U.S. sector are due to U.S. and global overproduction. As made clear in the report, Canada is not a contributor to the overproduction problem.”
The current chapter of this long-running dispute over Canada’s supply management system centres around a processing plant in Greenwood, Wisconsin. Grassland Dairy Products says it’s being forced to terminate milk contracts with about 75 farms due to the new ingredient strategy agreed to by Canadian dairy producers and processors. The changes to the Canadian pricing structure effectively makes U.S. imports of diafiltered milk less competitive in Canada.
But actual duty-free and quota-free access for milk protein substances, including diafiltered milk, from the U.S. into Canada has not changed, says MacNaughton:
Canada has not taken any broader actions to limit imports from the United States. As a matter of fact, Canada’s dairy industry is less protectionist than that of the U.S, which has employed technical barriers to keep Canadian dairy out of the U.S. market. Canada imports 6.3 percent of its cheese, 10 per cent of its butter and 10 per cent of its milk powders, while the U.S. imports 3 per cent of its cheese, 3 per cent of its butter and 8 per cent of milk powders notably less than Canadian imports.
Meanwhile, dairy and trade officials in New Zealand and Australia were quick to take Trump’s side following the president’s comments on Tuesday, saying they would support a challenge against Canada at the World Trade Organization.