Throughout the North American Free Trade Agreement (NAFTA) negotiating rounds, groups like the United States Dairy Export Council have been lobbying for increased market access into Canada. The Americans are looking for the same kind of access that they enjoy with Mexico.
This week we saw the signing of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) event set for March 8th, 2018, in Chile. The deal includes dairy access set at 3.25% among the Asia-Pacific trading group. This access was originally negotiated and pushed for by the United States — the only country is no longer part of the deal.
As noted yesterday by the Dairy Farmers of Ontario, although the loss of the U.S. represents a loss of approximately 60 percent of the original TPP market GDP, the original concessions to our domestic dairy market remain, “its a somber day for the 221,000 Canadians that depend on the dairy sector for their livelihood.”
Graham Lloyd, general manager of the Dairy Farmers on Ontario, says, “We were prepared for the deal when the government announced the deal in principle. We did ask the government to recalibrate the dairy access since the U.S. was no longer in the deal.”
Hear Shaun Haney and Graham Lloyd, General Manager of Dairy Farmers of Ontario.
Much of the Canadian media is running with the idea that the CPTPP agreement will hurt the NAFTA talks. Does this dairy access in CPTPP give Canadian negotiators any room for increased access for the U.S.?
“I am going to remain confident in the CPTPP providing that access. Our negotiators will hold steadfast and supply management is something they will not negotiate. Americans are already accessing our markets. The U.S. over-produces milk and increased dairy access into Canada is not going to fix their problem,” says Lloyd.
The Canadian auto sector has been very negative in describing the CPTPP deal, for example Jerry Dias, with Unifor, described the Asia-Pacific trade pact as, “the worst deal ever”
— Jerry Dias (@JerryPDias) January 23, 2018
Lloyd described the deal in this way, “I understand why the government had to get access to the Japanese markets; it’s one of the largest economies in the world. The 3.25% dairy access was given to Australia and New Zealand when it was supposed to be shared with the U.S. This is a challenge for us so there ought to be no more additional access in NAFTA.”
I think this is a glimpse into the dairy access battle that will eventually become a bigger part of the NAFTA discussions. The Americans will be looking for its own number while Canada will fight for no more increased access. Another consideration is that the talks are so focused on auto industry issues, could a Trump withdrawal happen before they ever start negotiating a hard market access number? Stay tuned.