U.S. dairy request a 'non-starter,' says ag minister


American requests for changes to Canada’s supply management system for dairy and poultry are a “non-starter,” said Canada’s agriculture minister on Monday.

U.S. negotiators introduced an initial dairy proposal on Friday, which calls for increased transparency and changes to Canada’s milk class system, including the elimination of the new class 7 that has taken away a price advantage for U.S. diafiltered milk imports. Late Sunday, the Americans put forward a much stronger demand, requesting access for 400,000 metric tonnes of fluid milk into Canada (~7x what Canada agreed to in the TPP) and for all tariffs related to supply management to be eliminated within ten years, as reported by Kelsey Johnson of iPolitics.

Lawrence MacAulay reiterated the Canadian government’s stance on maintaining supply management, speaking with Canadian reporters following the G7 ag ministers’ meeting in Italy over the weekend.

“It’s system we fought to put in place and I’ve indicated quite clearly our government is going to fight to make sure it stays in place. It’s a model for the world and that’s where we are. To deal with anything else is simply a non-starter,” he said.

With the fourth round of NAFTA negotiations continuing near Washington, DC, MacAulay spent some time with U.S. Ag Secretary Sonny Perdue in Europe. Perdue was also in Italy for the G7 meeting and World Food Day ceremonies with the Pope.

Echoing Prime Minister Trudeau’s “ready for anything” comments from last week, MacAulay acknowledged uncertainty about the future of NAFTA, with growing pessimism surrounding the talks.

“What will happen is difficult to know. We have very capable negotiators at the table, and it’s going to be done fair. We need a right deal, and we’re not going to sign any deal. We need a right deal,” he said.

In addition to NAFTA, MacAulay was also asked about the following ag trade issues on the media call:

Resolving technical barriers for beef and pork exports to Europe under CETA:

MacAulay discussed the issues with importers and government officials, including EU Ag Commissioner Phil Hogan. Canadian industry met with beef and pork importers. “If you look with our business partners eye to eye, you can resolve issues,” said MacAulay. “We will continue to work hard on any of the issues that are there.”

Italy’s new country-of-origin labeling rules for pasta, which could potentially hurt Canadian durum exports:

MacAulay said he brought the issue up with the Italian ag minister, EU Ag Commissioner Hogan and others. “We have rules with the CETA agreement and they have to follow the rules. I explained to them what we went through with the U.S. on COOL. The purchasers of our durum wheat are somewhat concerned too, so I indicated to them that they need to also put pressure on the government.” MacAulay said his Italian counterpart did not give any indication that his government plans to take COOL for pasta to the WTO.

On whether India has issued a new fumigation exemption for Canadian pulses, with the most recent three-month exemption expiring at the end of September:

“I know of nothing that has been announced as of yet, but our officials are still working hard with the Indian officials to make sure it’s done.” Given no new exemption, it’s unclear how India will handle Canadian pea and lentil shipments with bills of lading from Oct. 1 on.

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