Digging in to the Canada-U.S. dairy TRQ dispute, as the U.S. contemplates its next move

by

Canada is standing by its proposed solution regarding dairy tariff-rate quotas under the United States-Mexico-Canada Agreement (USMCA), as U.S. dairy groups continue to pressure the White House to escalate the matter. Earlier this week, U.S. trade representative Katherine Tai said Canada’s changes didn’t go far enough, and the proposed solution was a disappointment.

Jim Wiesemeyer with Pro Farmer, based out of Washington, D.C., weighed in on the situation and provides insight on what the next moves could be, what he’s hoping will be avoided, and what some of the potential motives could be surrounding the yet-to-be-heard decision from the U.S..

“First of all, I don’t think this says much for the what we thought was going to be an accelerated dispute resolution process on the new North American trade agreement,” says Wiesemeyer. “The USTR in Washington is consulting with what they call the stakeholders, Congress, on the next steps. They don’t say what the next step is. And [USDA secretary Tom] Vilsack doesn’t say retaliation, but at least a couple of dairy groups want the U.S. to retaliate.”

Wiesemeyer adds that he strongly hopes the response wont be in the way of retaliation, however it is, he doesn’t believe that it will come through the food sector. He speculates that the U.S. would avoid the food price environment and hit Canada with a blow in another industry.

Political strategy could also come into play and may determine the standpoints of some as we move closer to the midterm election this fall.

“Well, I won’t say they aren’t a factor. One key state is Wisconsin, that’s a battleground state for the Senate. So I just think the White House, they’re chalking up some losses left and right. So there’s your pressure, they need a win here and so the dairy issue could be wrapped up in the that.” says Wiesemeyer.

Additionally, we have to look at what is happening on a global level with trade. Indonesia has cut off palm oil exports, followed by India, which has essentially cut off wheat exports. Although Wiesemeyer says there are surely people in Congress who are in favour of doing the same and provides insights on the reality of that process as it relates to dairy and also fuel.

“There’s people in Congress that think it’s a good idea. When you have gasoline prices in every state over $4 and probably on their way to $5, the pressure grows on price controls. I hope that doesn’t happen,” says Wiesemeyer. “The House passed a bill on price controls for gas gouging, but I don’t think the votes are there in the Senate. Bottom line, I don’t think the United States will do that. I’ll guarantee you, when you have price controls, it makes matters worse, you put a price control on any commodity and you’ll have a shortage of it.”

He also discloses his take on the wheat cut-off by India. Wiesemeyer says that he believes the decision was made in order to get a true assessment of their new crop potential, after which, he predicts we will see a resurgence of wheat exports from India.

At the end of the day, Canada is holding strong on their position stating they have gone through the proper consultation process and as stated earlier, this is their final offer, to which the U.S. continues to hold their position, proclaiming they are right and just and that Canada has proposed an inadequate offer ever since this issue started.

Please register to read and comment.

Privacy Preference Center

Necessary

Necessary cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website. The website cannot function properly without these cookies.

gdpr, __cfduid, PHPSESSID, wordpress_test_cookie, woocommerce_items_in_cart, woocommerce_cart_hash, wp_woocommerce_session, wordpress_logged_in, wordpress_sec, wp-settings, wp-settings-time, __cf_mob_redir, wordpress_cache, realag
__cfduid

Marketing

Measuring interactions with the ads on the domain.

__gads,fsk_ut_2317
IDE

Statistics

These are used to track user interaction and detect potential problems. These help us improve our services by providing analytical data on how users use this site.

_ga,_gid,_gat,_cb,_chartbeat2,_chartbeat4
_ga,_gid
metrics_token

Preferences

Preference cookies enable the website to remember information that changes the way the website behaves or looks, like your preferred language or the region that you are in.

chartdefaults, comment_author, comment_author_email, comment_author_url
JSESSIONID, _os_session,anonymous_votes,csrf-param,csrf-token,user,user-id,user-platform,intercom-session,intercom-lou,intercom-session
personalization_id, tfw_exp

 

Register for a RealAgriculture account to manage your Shortcut menu instead of the default.

Register